THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


I    I  73 


WHY  THE  CAPITALIST? 


A    Refutation   of   the    Doctrines   Prevailing   in 
Conventional  Political  Economy. 


BY 

FREDERICK     HALLER 


Published  by  the  Author 
210  Pearl  St.,  Buffalo,  N.  Y. 

1914 


Copyright,  1914 
By  FREDERICK  HALLER 


All  Rights  Reserved.  Including   that  of  Translation  into 
Foreign  Languages.  Including  Scandinavian. 


JOHN     F.   HIGGINS 

PRINTER   AND  BINDER 


376-382    MONROE  STREET 
CHICAGO,     ILLINOIS 


vBSITY  OF  SOUTHERN  CALIFORNIA  LIBRARY 


TABLE  OF  CONTENTS 


Page. 

Introduction 5 

I     Property   11 

II     The  Morgan  and  the  Gentile 25 

III    The  Morgan's  Reach 43 

IV    Capital 50 

V    Capital — The  Element  of  Value 55 

VI     Capital— What  is  Meant  by  "Used"? 70 

VII     Capital— Production 77 

VIII     Capital— Produces  Nothing   82 

IX    The  Evaluation  of  Capital  and  Rating  of 

Profit 94 

X     Exploitation 104 

XI     Exploitation,  Continued  in  Merchandising.   119 
XII     Value,  Price  and  Profit 137 

XIII  An  Analysis  of  Wages 147 

XIV  The  Measure  of  Wages 154 

XV    The  Struggle  Over  Wages 164 

XVI     Supply  and   Demand 176 

XVII     Money 190 

XVIII     The  Bank  as  an  Agency  of  Exchange 204 

XIX     Commercial  Banking — The  Exploitation  of 

the  Exploiter 212 

XX    The  Morgan's  Crimp  Reforms,  Charity  and 

Efficiency 227 

XXI     The  Claim  that  Conditions  are  Improving.   241 
Conclusion 261 


mo^nn 


V. 


INTRODUCTION 


John  Stuart  Mill,  in  the  preliminary  remarks  to  his 
"Principles  of  Political  Economy,"  says: 

"It  often  happens  that  the  universal  belief  of  one  age  of  man- 
kind— a  belief  from  which  no  one  was,  nor  without  an  extraordinary 
effort  of  genius  and  courage,  could  at  that  time  be  free — becomes 
to  a  subsequent  age  so  palpable  an  absurdity,  that  the  only  difficulty 
then  is  to  imagine  how  such  a  thing  can  ever  have  appeared  cred- 
ible." 

Turgot  spoke  of  the  art  "of  those  who  set  themselves 
to  darken  things  that  are  clear  to  the  open  mind."    He  said : 

"This  art  consists  in  never  beginning  at  the  beginning,  but  in 
rushing  into  the  subject  in  all  its  complications,  or  with  some  fact 
that  is  only  an  exception,  or  some  circumstance,  isolated,  far- 
fetched or  merely  collateral,  which  does  not  belong  to  the  essence 
of  the  question  and  goes  for  nothing  in  its  solution.  *  *  *  Like 
a  great  geometer  who  treating  of  triangles  should  begin  with  white 
triangles  as  most  simple,  in  order  to  treat  afterwards  of  blue 
triangles,  then  of  red  triangles,  and  so  on." 

Add  to  the  foregoing  the  thought  that  the  writers  on 
political  economy,  like  the  generality  of  mankind,  are  all 
constantly  influenced  by  their  own  desire  to  attain  pleas- 
ure and  avoid  pain ;  in  other  words,  are  swayed  by  ma- 
terial interests,  and  we  shall  have  all  the  reasons  why 
political  economy  is  still  spoken  of  as  the  dismal  science. 

I  am  actuated  by  the  same  motives  that  actuate  the 
generality  of  mankind.  I  avow  my  amenability  to  the  same 
influences.  Besides  all  that,  I  claim  that  the  experiences 
of  my  own  life  have  given  me  an  incentive  to  pursue  an 
uncommon  course  of  study  in  such  an  uncommon  way  as 
to  enable  me  to  see  farther,  and  to  distinguish  more  clearly 
the  things  that  will  afford  me  real  pleasure  and  shield  me 
from  pain.  Therefore  this  book,  the  purpose  of  which 
is  to  trace  the  sequence  of  cause  and  effect  in  that  branch 


(j  INTRODUCTION 

of  study  which  deals  with  the  nature  of  society  and  its 
canons  of  production  and  distribution. 

The  twenty-one  chapters  of  argumentation  following 
are  devoted  to  an  analytical  discussion  of  the  economic 
doctrines  that  constitute  the  basis  of  business,  and  cause 
the  destructive  conflicts  and  confusion  now  wracking  human 
society.  The  discussion  in  these  twenty-one  chapters  pro- 
ceeds from  effect  to  cause;  taking  things  apart,  as  it  were, 
to  examine  into  the  nature  of  each  part  and  see  how  all 
the  parts  have  been  put  together. 

The  observations  made  in  conclusion  are  synthetic.  The 
discussion  there  proceeds  from  cause  to  effect,  and  the 
purpose  is  to  put  accepted  parts  together  in  logical  order 
and  connection  to  see  as  nearly  as  we  may  the  kind  of 
product  that  will  result.  The  many  changes  in  human 
society  that  must  of  necessity  follow  from  the  abolition 
of  individualism  in  the  control  of  the  resources  of  nature 
and  the  means  of  production  are  pointed  out  in  a  gen- 
eral way. 

The  intricate  ramifications  and  the  many  qualities  and 
overlappings  of  interests,  roles  and  characters,  and  their 
frequent  commingling,  blending  and  shading,  is  one  of 
the  principal  reasons  why  the  subject  of  political  economy 
has  been  considered  complex  and  why  its  serious  study 
has  not  been  made  attractive  by  any  of  the  many  wrriters 
who  have  heretofore  given  the  subject  attention. 

In  all  the  important  divisions  of  present  society  there 
are  those  who  severally  sustain  at  one  and  the  same  time, 
and  again  at  different  times,  widely  differing  roles  of 
entangled,  conflicting  interests.  These  differing  and  con- 
flicting interests  have  to  be  disentangled  and  analyzed  so 
as  to  separate  the  natural  and  inherent  from  the  artificial 
and  acquired,  the  true  and  abiding  from  the  false  and 
shifting.  To  trace  forward  these  different  and  divergent 
lines   of   consideration   without   resulting   weariness    calls 


INTRODUCTION  7 

for  a  treatment  of  the  whole  subject  matter  in  a  manner 
not  yet  essayed  by  any  other  writer  so  far  as  I  have  been 
able  to  learn. 

I  believe  that  I  have  met  the  special  requirements  of 
an  intelligent  presentation  of  the  subject  matter  by  means 
of  the  simple  device  of  grouping  the  members  of  society 
into  classes  and  orders,  according  to  their  natural  and  in- 
herent interests,  as  well  as  according  to  their  artificial  and 
acquired  interests ;  and  by  giving  to  each  class  and  to  each 
order  a  designation,  a  rank  and  a  personification  that  iden- 
tifies it  with  its  respective  functions,  influences  and  tenden- 
cies that  have  grown  out  of  and  that  rest  upon  those  sev- 
eral interests. 

The  plan  of  the  arrangement  is  intended  to  enable  the 
reader  to  hold  all  the  groupings  in  their  respective  classes 
and  orders,  and  to  hold  apart  all  their  respective  interests, 
thereby  to  facilitate  the  operation  of  carrying  them  forward 
separately  through  the  argument. 

The  class  that  has  dominated  humanity  and  dictated  its 
politico-economic  dogmas  throughout  historic  times  is  herein 
designated  the  "morgan."  The  class  that  has  been  dom- 
inated by  the  former  and  by  those  politico-economic  dog- 
mas I  have  designated  the  "gentile."  I  have  adopted  these 
designations,  not  because  of  any  claim  that  they  are  the 
best  that  possibly  could  be  found,  but  because  they  are 
the  best  that  I  could  find.  These  designations  are  not 
arbitrary.  They  recommend  themselves  to  me  because 
they  each  have  attributes  that  render  them  appropriate. 

The  word  "morgan"  comes  to  us  from  the  age  of  legend. 
It  was  the  name  of  a  fay  that  was  particularly  adept  in 
casting  spells  and  in  preparing  and  administering  over- 
powering draughts  and  poisonous  cups.  It  was  also  the 
name  of  a  noisome  weed  that  sometimes  became  inter- 
mingled with  wholesome  forage  and  caused  serious  loss 
when  eaten  by  domestic  animals.     It  was  also  at  one  time 


8  INTRODUCTION 

the  name  given  to  a  counterfeit  coin.  The  word  has  also 
been  used  to  signify  any  indifferent  and  specious  sort  of 
issue,  as  in  the  phrase,  "a  good  enough  morgan  till  after 
election." 

I  believe  that  these  associations  of  thought,  even  if  there 
wire  no  other,  are  sufficient  to  relieve  me  from  all  charge 
of  having  committed  any  violation  upon  language,  and 
sustain  me  in  using  the  substantive  "morgan"  in  a  generic 
sense  to  signify  the  spirit  that  subjugates  by  means  of 
covin,  chicane  and  violence. 

The  term  "morgan"  is  intended  to  represent  in  this  work 
the  class  in  human  society  that  is  possessed  of  the  dis- 
cordant spirit  that  is  always  hostile  to  the  fraternal  spirit 
of  gentile  society;  the  class  that  interrupted  the  growth 
of  gentile  society  by  introducing  individual  prowess  and 
a  diverting  obstruction  to  the  peaceful  evolution  of  the 
human  race  in  order  to  establish  a  reign  of  dominering 
vainglory. 

The  word  "gentile"  comes  to  us  from  our  remote  ances- 
tors who  lived  in  a  form  of  society  based  on  kinship  and 
the  interests  of  kinship.  The  individual  belonged  in  the 
kinship  group  called  the  gens,  the  several  gentes  were 
grouped  into  tribes  and  the  tribes  were  grouped  into  na- 
tions, or  confederations.  Private  property  in  the  resources 
of  nature  or  in  the  means  of  social  production  was  un- 
known in  that  form  of  society.  No  individual  had  an 
unsocial  interest.  There  were  no  interests  adverse  to  the 
common  interest  of  the  nation,  tribe  and  gens. 

The  term  "gentile"  as  employed  in  this  work  is  intended 
to  represent  the  masses  of  humanity  whose  true  and  lasting 
interests  are  still  social  and  gentile:  those  who  are  de- 
prived by  the  state  and  by  the  law  of  all  their  portion  of 
that  which  nature  furnishes  spontaneously;  those  who  are 
deprived  of  all  their  share  and  portion  of  the  vast  benefits 
that  How  from  the  accumulation  and  merging  of  the  thought, 


INTRODUCTION  V 

labor  and  experience  of  our  common  ancestors ;  those  who 
are  deprived  of  all  their  share  and  portion  of  the  benefits 
that  flow  from  the  natural  extension  of  human  power  by 
reason  of  the  very  existence  of  the  contemporary  social 
body ;  and  particularly  who  by  reason  of  their  expropria- 
tion of  all  the  riches  and  benefits  referred  to,  are  com- 
pelled to  buy  their  livelihood  with  their  labor  power,  under 
terms  forced  upon  them  by  the  predicament  in  which  they 
are  placed,  and  then  are  despoiled  of  far  the  greater  part 
of  that  also  which  is  produced  by  their  labor. 


WHY  THE  CAPITALIST? 


CHAPTER  I. 
PROPERTY. 

Property,  in  the  commonly  accepted  sense,  consists 
of  that  which  belongs  exclusively  and  permanently  to  a 
person  and  cannot  be  taken  from  that  person  without  his 
consent.     It  means  full,  complete  and  absolute  title. 

Property  in  its  essential  and  true  nature  means  the 
assurance  that  the  state  will  at  all  times  exercise  all  of  its 
power  to  exclude  all  other  persons  than  the  owner  from 
all  use  and  enjoyment  of  the  thing  of  which  ownership 
is  claimed.  It  includes  the  full  and  complete  right  of 
the  owner  to  consume,  obliterate  and  to  completely 
destroy. 

The  right  to  consume,  obliterate,  destroy  and  to  ex- 
clude others  is  the  essence  of  all  claims  of  ownership. 

All  nature,  however,  denies  and  is  constantly  disput- 
ing the  claim  to  absolute  ownership  of  anything  save 
and  except  one  thing  only,  and  that  one  thing  is  service. 
Despite  all  that  man  has  ever  done,  can  now  do  or  ever 
will  be  able  to  do,  nature  is  constantly  denying,  and  she 
laughs  to  scorn,  all  claims  and  pretensions  to  private 
ownership  excepting  only  in  the  one  thing  stated,  name- 
ly, service.  In  all  the  rest  of  man's  proudly  asserted 
wealth  in  material  things,  nature  vouchsafes  to  him  only 
a  usufruct.  His  ownership  of  service,  however,  when 
acquired,  is  complete.  He  uses  it  and  in  using  it  con- 
sumes the  right,  leaving  not  the  slightest  remnant  or 
vestige. 

Not  so  as  to  his  other  claimed  ownership.     His  title 

11 


12  WHY  TIIF.  CAPITALIST? 

to  land  and  chattels  which  nature  allows,  does  not  differ 
in  the  slightest  degree,  in  principle,  from  the  title  he 
has  in  a  lung  full  of  air.  The  only  difference  is  that  he 
Tts  dominion  over  one  a  little  longer  than  over  the 
other.  Every  molecule  of  air  that  he  inhales  is  hardly 
within  his  lungs  but  it  immediately  turns  upon  its  heels 
and  rushes  out  again.  He  could  not  hold  it  in  absolute 
ownership  if  he  would,  and  would  not  if  he  could.  The 
water  he  drinks  he  holds  but  a  little  while  longer  than 
the  air  he  breathes,  the  food  he  eats  yet  a  little  longer, 
the  nutriment  his  system  extracts  from  the  food  a  little 
longer  still.  The  clothes  he  wears,  his  gold,  his  auto- 
mobile, his  house,  all  obey  the  inexorable  law,  whether 
he  wishes  it  or  not,  consents  or  protests. 

Man  does  not  and  cannot  exercise  complete  dominion 
over  the  slightest  particle  of  matter.  Do  what  they  like, 
all  mankind  by  their  united  efforts  could  not  obliterate, 
render  into  nothing,  a  single  acorn.  Every  atom  of  that 
acorn  has  existed  throughout  the  eternal  past.  It  is 
destined  to  continue  in  never  ending  transmutations, 
and  will  continue  to  exist  throughout  the  eternity  of 
the  future.  Who  can  doubt  that  each  of  these  atoms 
will  enter  into  every  form  of  existence  and  in  due  course 
again  enter  into  the  formation  of  other  acorns  countless 
millions  of  times?  Where  then  is  the  basis  of  man's 
assertion  of  ownership  of  material  things?  All  that  he 
has  is  a  usufruct.  He  has  nothing  more  than  the  right 
to  use  for  his  own  maintenance  and  present  life  and  so 
far  as  his  maintenance  and  life  is  to  be  subserved,  he  can 
rightfully  exclude  all  others  for  the  time  being  from  the 
material  things  he  is  using.  There  is  but  one  thing  ac- 
quired by  him  that  he  completely  uses  up,  consumes. 
Service  is  the  only  thing  that  under  nature's  laws  he  can 
assert  complete  ownership  or  dominion  over. 

Man's  mind  is  over-powered  by  a  simple  phenomenon 


PROPERTY  13 

of  nature.  His  needs  give  to  him  temporary  dominion 
over  so  much  of  matter  and  of  nature's  forces  as  are  re- 
quired to  satisfy  the  requirements  of  his  life.  From  this 
he  assumes,  erroneously,  a  perpetuity  of  ownership  and 
dominion  vested  in  himself  and  extends  that  ownership 
and  dominion  over  everything  and  over  so  much  of 
everything  that  he  can  exclude  others  from.  He  falls 
into  the  way  of  thinking  that  as  a  matter  of  course,  all 
that  is  necessary  to  give  absolute  ownership  is  to  exer- 
cise against  others  the  physical  power  of  exclusion. 

If  a  morgan  had  power  to  exclude  the  rest  of  man- 
kind from  the  Atlantic  Ocean,  or  from  Lake  Erie  by  vir- 
tue of  the  size  and  reach  of  his  bludgeon,  or  by  virtue 
of  the  power  of  state  arrayed  on  his  side,  then  this  mor- 
gan would  also  actually  believe  that  he  alone  owned  the 
ocean,  or  the  lake,  and  everything  contained  in  the  lake. 
The  extent  of  his  ratiocination  would  be  that  his  power 
to  club  off  all  other  men,  or  have  the  state  to  club  them 
off  for  him,  gave  to  him  the  right  of  absolute  ownership 
over  everything  coming  within  the  reach  of  such  power. 
He  plants  himself  upon  this  to  him  sufficient  right  of 
property  and  promulgates  and  has  others,  parading  as 
censors  of  morals  and  sage  counselors,  to  preach  and 
teach  into  the  minds  of  the  excluded  humanity  a  special 
system  of  morals  and  learning  on  the  rights  of  property. 

These  censors  and  sages  have  given  together  a  veri- 
table Augean  stable  of  theology  and  jurisprudence.  All 
is  designed  to  cover  up  and  carefully  conceal  the  cardinal 
fact  that  the  claim  of  perpetual  ownership  in  material 
things  rests  entirely  upon  the  power  to  exclude.  The 
mass  of  humanity  has  been  kept  so  busy  quarreling  about 
inconsequential  things  that  they  have  had  no  time  left  to 
inquire  into  the  basis  of  the  claim  of  property  so  success- 
fully asserted  by  the  real  trouble  makers,  past  and 
present. 


1  1  WHY  THE  CAPITALIST? 

Some  of  the  conventional   economists   use  the  term 
"free  goods  of  nature"  as  applied  to  air,  water,  sunheat, 
sunshine  and  such  other  things  as  the  morgan  has  not 
yet  been  able  to  exclude  us  from.     They  concede  that 
these  "free  goods  of  nature"  cannot  be  property,  but  say 
that  none  of  the  other  needful  things  furnished  by  nature 
are  "free  goods"  because  they  can  be  and  have  been  ap- 
propriated by  individuals.    For  instance,  the  atmospheric 
air  that  we  breathe  consists  of  about  76.7  per  cent  nitro- 
gen and  23.2  per  cent  oxygen  and  0.1  per  cent  carbonic 
acid  gas,  besides  the  watery  vapor.     Nitrogen  therefore 
exists  in  illimitable  quantities  in  the  atmosphere  about 
the  earth.     Nitrogen  also  enters  largely  into  the  food- 
stuffs, containing  albumen  and  fibrine  such  as  meat,  fish, 
eggs,  milk,  beans,  peas  and  many  other  foods  produced 
by  nature  in  her  laboratory.    You  could  not  have  beans, 
or  any  of  the  other  things  mentioned,  if  there  were  not 
any  nitrogen  about.    Nitrogen  when  taken  into  our  lungs 
as  an  ingredient  of  the  air  we  breathe  is  conceded  to  be 
one  of  the  "free  goods"  of  nature  because  no  morgan  is 
yet  able  to  expropriate  us  of  it  in  that  form ;  but  when 
this  nitrogen  is  in  the  beans  we  eat,  even  aside  from  the 
value  created  and  imparted  to  the  bean  by  labor,  it  is 
not  at  all  regarded  as  one  of  the  "free  goods"  of  nature, 
because  the  morgan  has  been  able  to  expropriate  us  of  it 
in  this  form.     That  is  all  the  difference.     If  you  take 
nitrogen  into  your  lungs  as  a  dilutor  of  the  oxygen,  it  is 
free.    If  you  want  to  take  it  into  your  stomach  for  nour- 
ishmen,  it  is  not  free,  but  is  private  property,  and  you 
will  have  to  make  yourself  a  slave  of  the  morgan  to  get 
a  little  of  it  for  nourishment. 

Those  of  us  living  in  northern  latitudes  know  the  dif- 
ference between  paying  for  coal  during  the  winter  time 
to  keep  warm,  and  being  kept  warm  in  the  summer  by 
the  heat  we  get  directly  from  the  sun.    Coal  in  the  earth 


PROPERTY  15 

is  one  of  the  free  goods  of  nature  the  same  as  the  sun's 
heat.  In  fact  coal  is  sun-heat  stored  up  by  nature.  Yet 
when  we  want  coal  we  have  to  pay  for  the  digging  of  the 
coal  and  bringing  it  to  us,  and  we  are  also  compelled  to 
pay  the  morgan  owner  of  the  mine  for  the  coal  itself. 
That  gentleman  "owns"  the  mine  and  his  state  backs 
him  up  in  his  ownership.  We  might  well  be  thankful 
every  day  of  our  lives  that  no  one  has  yet  found  a  way 
for  the  morgan  to  gather  up  from  day  to  day  all  of  the 
sun's  heat  and  store  it  for  the  glorious  advancement  of 
trade  and  commerce.  Just  think  how  delightful  it  would 
be  to  have  bills  for  sun  heat  staring  us  in  the  face  all  the 
year  round ! 

How  fortunate  we  are  that  the  morgan  has  not  the 
power  to  turn  a  switch  and  shut  off  the  heat  or  the  light 
of  the  sun,  or  to  cut  off  our  respective  supplies  of  the 
earth's  power  of  gravitation,  that  power  by  which  every- 
one is  held  on  to  the  ball!"  Just  think  of  the  revenue  the 
morgan  would  be  getting  by  "supplying"  us  with  these 
essentials  of  life  by  letting  us  have  them  at  fixed  rates. 
He  already  has  seized  a  small  part  of  the  power  con- 
tained in  the  earth's  pull  of  gravitation,  and  reaps  quite  a 
revenue  from  it  by  "supplying"  us  with  electricity  gen- 
erated at  numerous  water  falls.  But  to  cut  off  our  sup- 
ply of  the  power  that  old  mother  earth  furnishes  and 
that  we  get  through  a  wire  under  present  methods,  will 
seem  crude  indeed  if  the  morgan  ever  finds  a  way  to 
sever  the  cord  of  individual  gravitation  so  that  he  can 
send  anyone  of  us  flying  off  into  space,  have  the  earth 
drop  us  off,  should  we  find  it  inconvenient  to  pay  him  his 
bill  for  "supplying"  us  with  gravitation.  Such  a  sum- 
mary proceeding  would  make  an  Irish  landlord  green 
with  envy.  It  makes  one  dizzy  to  think  of  the  addi- 
tional billions  of  wealth  that  we  shall  have  as  a  result  of 
this  most  wonderful  achievement  of  civilization,  when  a 


18  WHY  THE  CAPITALIST? 

morgan  "supplies"  every  man,  woman  and  baby  with 
the  gravitation  to  hold  on  to  the  earth  with,  at  so  much 
per  kilowatt. 

There  are  three  fallacies  or  illicit  conclusions  in  the 
reasoning  on  which  the  claim  of  complete  and  absolute 
title  to  private  property  in  things  is  based.  The  first  is 
as  to  the  duration  of  the  title,  the  second  is  as  to  the 
extent  of  the  right  claimed  under  the  title,  and  the  third 
is  as  to  the  volume  of  the  thing  to  which  title  is  asserted. 

As  to  the  first  of  these  fallacies  relating  to  duration 
of  title:  Property  is  based  upon  the  claim  to  a  perpetual 
and  never  ending  ownership,  an  ownership  to  continue 
on  by  proxy  after  one  owner  has  ceased  using  or  need- 
ing; and  under  it  he  assumes  to  dictate  who  shall  be  the 
proxy  in  excluding  others  from  the  use  of  the  earth.  For 
instance,  A  is  upon  the  public  street.  He  has  a  qualified 
property  right  in  the  spot  where  he  stands.  So  long  as 
he  is  there  he  excludes  all  other  persons  from  the  par- 
ticular spot  occupied  by  him.  If,  when  A  has  no  longer 
any  use  or  need  of  the  spot  he  is  occupying  he  should 
insist  upon  the  right  to  exclude  everybody  else  from  oc- 
cupying or  using  that  particular  spot  save  upon  payment 
of  ground  rent  to  him  for  the  privilege,  we  should  have 
a  simple  example  of  the  first  of  the  three  fallacies, 
namely,  the  assertion  of  a  perpetual  title. 

If  A,  having  no  further  personal  use  for,  or  need  of 
the  part  of  the  street  that  he  last  occupied,  should  insist 
on  holding  on  to  it  by  standing  continuously  on  the  spot 
night  and  day,  or  by  planting  a  post  in  the  ground  there, 
taking  up  the  space,  or  by  placing  a  heavy  barrel  or 
package  upon  the  spot  so  that  no  one  else  could  use  it, 
we  should  have  an  example  of  the  second  fallacy, 
namely,  as  to  the  extent  of  the  right  of  user  under  title 
to  the  property.  Here  would  be  the  assertion  of  com- 
plete control  and  dominion  over  all  the  rest  of  mankind, 


PROPERTY  17 

not  only  as  to  that  spot  of  earth  and  the  exclusion  of 
them  from  the  use  of  it,  but  also  to  the  assertion  of  a 
right  to  a  different  use  than  that  of  standing  there  per- 
sonally or  passing  and  repassing;  including  the  right  to 
obstruct  and  impair  to  an  extent  the  usefulness  of  the 
surrounding  surface.  We  should  there  have  a  simple 
illustration  of  the  second  fallacy,  namely,  that  his  right 
of  property  was  absolute  and  unlimited. 

If  A,  because  he  was  passing  or  had  passed  along  a 
street,  should  thereafter  insist  in  excluding  everybody 
else  from  the  whole  of  that  street  and  had  the  physical 
power  to  exclude  them,  we  should  have  an  example  of 
the  third  kind  of  fallacy,  namely,  as  to  the  volume  of  the 
thing  covered  by  the  claim  of  title  and  property.  We 
should  have  a  man  claiming  the  right  to  exclude  every- 
body from  the  whole  of  a  thing  because  he  was  right- 
fully having  or  had  rightfully  had  for  a  short  time  the 
use  of  a  small  portion  of  it  for  certain  purposes  only. 

Or  to  take  another  illustration.  If  A  had  a  ticket  to  a 
theater  for  one  performance  at  which  no  seats  were  re- 
served by  the  box  office,  and  then  by  virtue  of  that 
ticket,  as  soon  as  he  got  in,  he  asserted  the  right  to  ex- 
clude everybody  else  from  a  whole  section  of  say  a 
hundred  seats,  not  only  for  that  night  but  for  all  suc- 
ceeding nights,  save  as  he  would  rent  to  them,  sell  to 
them  or  will  to  them  the  right  to  occupy,  and  should  also 
insist  upon  putting  kegs  or  heavy  boxes  upon  as  many 
seats  as  he  chose,  then  we  should  also  have  an  example 
of  all  three  of  the  fallacies,  namely,  as  to  duration  of 
title,  as  to  right  of  user  under  the  title  claimed,  and  as 
to  the  volume  of  the  thing  to  which  title  is  claimed. 

If  A  should  in  any  of  the  examples  stated  enforce  his 
claims  and  pretensions  by  virtue  of  his  own  strong  arm 
or  with  the  assistance  of  friends  or  retainers,  he  would 
be  holding  his  so-called  property  only  by  virtue  of  his 


18  WHY  THE  CAPITALIST? 

own  physical  prowess,  and  would  hold  it  only  so  long 
as  he  would  be  able  to  beat  off  all  other  strong  men. 

But  assume  that  in  order  to  prevent  himself  from  be- 
ing disturbed  in  his  possession  by  any  superior  force,  A 
gets  the  sovereign  power  of  the  state  to  sanction  and 
support  his  claim.  Then  everyone  daring  to  disregard 
any  of  A's  claims  of  private  ownership,  and  seeking  to 
make  use  of  the  street  or  the  seats  in  the  theatre  that  A 
cannot  use  and  does  not  need  himself,  will  be  a  rebel. 
The  state  will  dispatch  the  police,  the  sheriff's  officers, 
and  the  soldiers  to  beat  the  rebels  off.  This  would  be 
the  exercise  of  the  war  power  to  sustain  and  uphold  this 
institution  of  property. 

William  Blackstone,  the  greatest  of  all  the  spokesmen 
and  apologists  of  English  common  law,  was  unable  to 
find  anything  else  than  force  to  sustain  the  right  of 
property.     He  said : 

"There  is  nothing  which  so  generously  strikes  the  imagination 
and  engages  the  affections  of  mankind  as  the  right  of  property; 
of  the  sole  and  despotic  dominion  which  one  man  claims  and  exer- 
cises over  the  external  things  of  the  world,  in  total  exclusion  of 
the  right  of  any  other  individual  in  the  universe,  and  yet  there 
are  very  few  that  will  give  themselves  the  trouble  to  consider  the 
original  and  foundation  of  this  right. 

Pleased  as  we  are  with  the  possession,  we  seem  afraid  to  look 
back  to  the  means  by  which  it  was  acquired,  as  if  fearful  of  some 
defect  in  our  title;  or,  at  best  we  rest  satisfied  with  the  decision 
of  the  laws  in  our  favor  without  examining  the  reason  or  author- 
ity upon  which  those  laws  have  been  built. 

We  think  it  enough  that  our  title  is  derived  by  the  grant  of 
the  former  proprietor,  by  descent  from  our  ancestors,  or  by  the 
last  will  and  testament  of  the  dying  owner;  not  caring  to  reflect 
that,  accurately  and  strictly  speaking,  there  is  no  foundation  in 
nature  or  in  natural  law  why  a  set  of  words  upon  parchment  should 
convey  the  dominion  of  land;  why  the  son  should  have  the  right 
to  exclude  his  fellow  creatures  from  a  determined  spot  of  ground 
because  his  father  had  done  so  before  him;  or  why  the  occupier 
of  a  particular  field  or   of  a  jewel,  when  lying  on  his  death  bed 


PROPERTY  10 

and  no  longer  able  to  maintain  possession,  should  be  entitled  to 
tell  the  rest  of  the  world  which  of  them  should  enjoy  it  after  him. 

These  inquiries,  it  must  be  owned,  would  be  useless  and  even 
troublesome  in  common  life.  It  is  well  if  the  mass  of  mankind 
will  obey  the  laws  when  made,  without  scrutinizing  too  nicely 
into  the  reasons  of  making  them.  But  when  a  law  is  to  be  con- 
sidered not  only  as  a  matter  of  practice,  but  also  as  a  rational 
science,  it  cannot  be  improper  or  useless  to  examine  more  deeply 
the  rudiments  and  grounds  of  these  positive  constitutions  of  so- 
ciety." 

James  Kent,  the  American  apologist  and  commenta- 
tor on  the  law  said : 

"It  is  a  fundamental  principle  in  the  English  law,  that  the  king 
was  the  original  proprietor,  or  lord  paramount  of  all  the  land  in 
the  kingdom,  and  the  true  and  only  source  of  title.  In  this  coun- 
try we  have  adopted  the  same  principle,  and  applied  it  to  our 
republican  governments ;  and  it  is  a  settled  and  fundamental  doc- 
trine with  us,  that  all  valid  individual  title  to  land  within  the 
United  States  is  derived  from  the  grant  of  our  own  local  gov- 
ernments, or  from  that  of  the  United  States,  or  from  the  crown, 
or  royal,  chartered  governments  established  here  prior  to  the  Rev- 
olution." 

As  bearing  upon  the  right  of  private  property,  it  will 
be  interesting  to  quote  from  an  opinion  of  the  New  York 
Court  of  Appeals,  in  a  recent  decision.    That  court  says: 

"The  right  to  make  a  testamentary  disposition  of  or  the  right 
to  inherit  property  is  not  an  inherent  right ;  nor  is  it  guaranteed 
by  the  fundamental  law.  Its  exercise  to  any  extent  depends  entirely 
upon  the  consent  of  the  legislature  as  expressed  in  their  enact- 
ments. It  can  withhold  or  grant  the  right,  and  if  it  grants  it,  it 
may  make  its  exercise  and  its  extent  subject  to  such  burdens  and 
requirements  as  it  pleases.  Wherein  the  legislature  is  silent  in 
the  matter  of  the  devolution  of  property,  the  courts  cannot  speak, 
and  as  it  has  spoken,  the  courts  must  obey  and  enforce." 

(Matter  of  White,  2Qfi  X.  Y.  r;i-i;;.) 

No  better  or  more  rational  basis  for  private,  absolute 
ownership  has  ever  been  given  than  those  given  by 
Blackstone  and   Kent.     Expediency  has  been  the  only 


20  WHY  THE  CAPITALIST? 

argument  ever  urged  by  them  in  support  of  the  institu- 
tion of  property. 

Expediency  is  always  an  artificial  means  of  escape 
from  difficulty  and  embarrassment.  It  is  always  based 
upon  the  plea  of  necessity.  The  plea  of  necessity  will, 
however,  no  longer  do. 

The  individual  enjoyment  of  the  bounties  of  nature 
does  not  necessitate  impossible  perpetual  individual  own- 
ership of  them.  The  air  taken  into  my  lungs,  is  in  my 
exclusive  possession  and  use  during  a  short  period  of 
time.  Very  soon  it  leaves  my  possession,  under  nature's 
process  becomes  cleansed,  fit  and  wholesome  again,  and 
enters  the  lungs  of  others  to  perform  a  like  service.  The 
same  is  true  of  the  water  that  I  drink,  of  the  food  I  eat 
and  of  everything  else  material  that  I  use.  Everything 
comes  from  the  great  melting  pot  and  in  due  course  re- 
turns to  the  melting  pot  again.  Would  anyone  say  that 
in  order  that  I  may  fill  my  lungs  with  air  as  often  as 
necessary  to  maintain  health  that  I  must  have  title  in 
fee  simple  absolute  to  a  hundred  cubic  acres  or  cubic 
miles  of  the  atmosphere,  or  that  because  my  system 
craves  fresh  water  I  must  have  a  fee  simple  absolute  of 
a  like  quantity  of  a  lake  or  of  a  rain  cloud. 

If  a  morgan  could  ever  have  gotten  any  scheme  by 
which  he  could  have  excluded  the  rest  of  mankind  from 
getting  lungs  full  of  air,  he  would  certainly  have  availed 
himself  of  that  means  also  of  making  money.  The  same 
is  true  as  to  water.  If  it  were  not  for  periodical  rain- 
falls, and  if  water  were  only  to  be  had  from  certain 
places,  i.  e.,  lakes  and  ponds,  like  deposits  of  coal,  it 
would  in  all  probability  be  impossible  for  the  rest  of  us 
to  obtain  a  drop  of  water  to  drink  without  paying  tribute 
to  a  morgan,  as  it  is  impossible  now  to  obtain  a  pound 
of  coal  without  paying  tribute  to  the  morgan  that  stands, 
club  in  hand,  over  the  coal  in  the  earth. 


PROPERTY  21 

The  proposition  that  one  should  be  compelled  to  pay 
some  morgan  for  the  air  he  breathes,  or  for  the  water 
that  he  drinks,  seems  absurd.  It  is  absurd  for  the  reason 
only  that  our  minds  are,  with  reference  to  air  and  water, 
in  a  more  healthful  and  natural  condition  than  with  ref- 
erence to  many  other  things  that  are  equally  the  free 
goods  of  nature.  So  effective  is  the  power  of  suggestion 
on  the  human  mind  that  if  the  morgans,  assisted  by  the 
persistent  driving  and  hammering  of  priests,  preachers, 
writers,  courts,  politicians,  policemen  and  soldiers,  had 
impressed  upon  the  minds  of  past  generations  of  human- 
ity the  sacredness  of  private  property  in  air  and  water,  as 
they  did  as  to  other  things  that  all  nature  equally  denies 
property  in,  then  we  should  today  also  be  sending 
wretches  to  prison,  if  possible,  for  stealing  the  morgan's 
air  by  breathing  it  and  for  stealing  his  water  by  drinking 
it  without  paying  the  price. 

Breathing  the  air  and  drinking  the  water  is  no  different 
in  principle  from  standing  or  lyng  upon  the  earth  or  tak- 
ing coal  out  of  the  ground.  Yet  we  cannot  do  either  of 
the  latter  without  permission  from  or  paying  tribute  to 
some  morgan. 

The  argument  of  necessity  of  ownership  of  the  earth 
is  stretched  to  the  cracking  point.  It  asserts  that  we 
cannot  inhabit  the  earth  unless  we  have  private  owner- 
ship of  the  earth.  It  prophesies  that  inevitable  confusion 
and  never-ending  controversy  would  result,  that  each  one 
would  fight  to  occupy  the  most  desirable  places  on  the 
surface  of  the  earth.  The  difference  in  desirability  of 
dwelling  places  is  very  much  exaggerated.  The  actual 
natural  differences  in  desirability  can  with  comparatively 
little  effort  on  the  part  of  the  state  be  almost  wholly 
eliminated.  The  actual  and  practical  differences  now 
existing  are  artificial.  They  are  unnecessary.  They  have 
been  produced  and  are  maintained  by  morgans,  actuated 


22  WHY  THE  CAPITALIST? 

by  a  never-to-be-satisfied  greed  for  gain  and  craving  for 
domination.  As  to  the  exceptional  spots  of  beauty, 
along  the  streams,  beside  the  lakes,  overlooking  water 
falls,  mountain  scenes,  or  sea  shores,  that  once  were  all 
held  as  private  property  by  morgans,  and  some  that  arc 
still  so  held,  we  have  long  since  come  to  understand  and 
are  more  and  more  realizing  that  these  are  not  for  the 
exclusive  use  of  any  individual,  but  are  to  be  used  by 
all  mankind  as  public  parks  and  pleasure  grounds.  There 
does  not  appear  even  now,  with  the  small  number  of  such 
public  parks,  to  be  any  disposition  on  the  part  of  human- 
ity to  indulge  in  any  brawls  or  controversies  about  the 
enjoyment  of  these  beauty  spots  as  parks.  Their  use  in 
common  at  present  as  public  domain  does  not  present 
any  difficult   problems  whatsoever. 

With  the  beauty  spots  used  in  common  as  public 
parks,  and  with  the  hideous  features  created  by  morgans, 
such  as  crowded  and  narrow  streets  and  alleys  and  un- 
sightly mills  in  the  wrong  places,  eliminated,  the  re- 
mainder of  the  earth  will  afford  in  abundance  dwelling 
places  of  practically  equal  desirability  for  all  mankind. 
There  is  plenty  of  room  for  each  one  to  have  a  large 
corner  lot  on  a  broad  avenue.  The  inherent  differences 
in  the  desirability  of  dwelling  places  is  scarcely,  if  any, 
greater  than  the  differences  in  the  air  we  breathe  or  the 
water  we  drink.  Mountain  air,  sea  air,  mountain  water 
and  water  of  the  plains  and  low  lands,  with  all  their 
gradations  present  fully  as  many  differences,  yet  we 
do  not  find  any  controversy  over  these,  on  which  to  pred- 
icate an  argument  for  private  ownership. 

What  has  been  said  of  the  beauty  spots  on  the  sur- 
face of  the  earth  might  with  equal  force  be  said  of  the 
moveable  articles  of  rare  beauty  and  attraction.  These 
things,  however,  when  they  do  not  constitute  the  means 
of  production,  have  little  bearing  on  the  economic  con- 


PROPERTY  23 

ditions  and  problems  of  society.  The  exclusive  posses- 
sion of  them  does  not  interfere  appreciably  with  the  get- 
ting- of  a  livelihood  by  the  mass  of  mankind.  It  might., 
however,  be  said  in  passing  that  rare  gems,  works  of  art 
and  curios  are  gradually  finding  their  way  into  public 
museums  where  the  people  may  see  them  and  enjoy 
them.  After  all,  that  is  the  real  enjoyment  they  afford, 
even  to  the  owner,  outside  of  the  pleasure  he  may  find  in 
calling  himself  the  proprietor.  The  asserted  ownership 
of  land  carries  with  it  the  control  of  natural  resources 
and  has  far  reaching  consequences. 

The  stock  argument  that  in  this  country  there  is 
plenty  of  land,  and  the  "go  west,  young  man"  advice 
does  not  meet  the  situation,  or  affect  the  principle  in- 
volved. It  concedes  the  argument  and  seeks  to  postpone 
the  consideration.  The  time  for  that  has,  however,  long 
since  past.  Furthermore,  a  very  small  percentage  of  man- 
kind is  physically  or  otherwise  able,  or  equipped  or  in- 
clined to  embark  on  pioneering  enterprises.  The  great 
majority  of  civilized  people  have  by  reason  of  heredity, 
environment,  training,  education,  mode  of  life  and  tem- 
perament been  rendered  much  more  capable  and  useful 
in  other  walks  of  life,  and  have  at  the  same  time  to  the 
same  extent  been  rendered  unfit  to  engage  in,  or  to  under- 
take, the  perils  of  a  pioneer  life. 

Those  who  assert  a  private  ownership  of  the  things 
which  in  their  very  nature  cannot  be  property  are,  and 
always  have  been,  the  plague  and  scourge  of  the  human 
race.  This  is  not  intended  to  be  an  expression  of  hatred. 
It  is  only  a  statement  of  fact  deduced  from  history.  It 
is  puerile  to  hate  anything.  It  is  unnecessary  to  classify 
the  expropriators  among  either  the  good  or  the  evil 
things.  The  many  pests  and  misfortunes  that  sorely 
afflicted  the  lives  of  our  ancestors  might  very  well  be 
regarded  as  having  been  necessary  for  the  progress  and 


24  WHY  THE  CAPITALIST? 

development  of  the  human  race.  Had  it  not  been  for 
smallpox,  yellow  fever,  diphtheria  and  other  like  dis- 
eases, we  should  have  learned  very  little  about  our  own 
bodies.  Throughout  the  past  down  to  comparatively 
recent  times  these  ailments  were  beyond  the  power  of 
man  to  understand,  much  less  to  master.  Many  regarded 
them  as  being  inherent  in  human  nature,  others  regarded 
them  as  being  visitations  of  divine  punishment  for  per- 
sistent sinfulness.  The  scientific  mind,  however,  per- 
sisted in  its  work  of  investigating,  analyzing,  synthesiz- 
ing and  experimenting  to  relieve  the  race  of  man  from 
these  sore  afflictions.  The  cry  of  "It  cannot  be  done" 
constantly  resounded  in  the  ears  of  these  brave  and  pa- 
tient men.    Yet  is  was  and  is  being  done. 

Lewis  H.  Morgan  in  his  invaluable  work,  Ancient  So- 
ciety, says: 

"Since  the  advent  of  civilization,  the  outgrowth  of  property 
has  been  so  immense,  its  forms  so  diversified,  its  uses  so  expand- 
ing and  its  management  so  intelligent  in  the  interest  of  its  owners 
that  it  has  become,  on  the  part  of  the  people,  an  unmanageable  power. 
The  human  mind  stands  bewildered  in  the  presence  of  its  own 
creation.  The  time  will  come,  nevertheless,  when  human  intelli- 
gence will  rise  to  the  mastery  over  property,  and  define  the  relations 
of  the  state  to  the  property  it  protects,  as  well  as  the  obligations 
and  the  limits  of  the  rights  of  its  owners.  The  interests  of  so- 
ciety are  paramount  to  individual  interests,  and  the  two  must  be 
brought  into  just  and  harmonious  relations.  A  mere  property 
career  is  not  the  final  destiny  of  mankind,  if  progress  is  to  be  the 
law  of  the  future  as  it  has  been  of  the  past.  The  time  which  has 
passed  away  since  civilization  began  is  but  a  fragment  of  the  past 
duration  of  man's  existence  and  but  a  fragment  of  the  ages  yet 
to  come.  The  dissolution  of  society  bids  fair  to  become  the  ter- 
mination of  a  career  of  which  property  is  the  end  and  aim,  be- 
cause such  a  career  contains  the  elements  of  self-destruction. 
Democracy  in  government,  brotherhood  in  society,  equality  in 
rights  and  privileges,  and  universal  education,  foreshadow  the  next 
higher  plane  of  society  to  which  experience,  intelligence  and  knowl- 
edge are  steadily  tending.  It  will  be  a  revival,  in  a  higher  form, 
of   the  liberty,   equality   and  fraternity    of  the  ancient  gentes." 


CHAPTER  II. 
THE  MORGAN  AND  THE  GENTILE. 

There  was  a  time  when  our  ancestors  did  not  know  of 
private  ownership  of  any  of  the  forces  or  things  supplied 
by  nature.  Society  was,  of  course,  differently  consti- 
tuted then.  This  subject  has  furnished  a  rich  literature 
and  promises  much  more.  It  is  not  necessary  for  my 
purpose  to  go  into  it  any  further  than  to  say  that  our 
ancestors  were  freemen  of  equal  endowment  before  there 
were  either  chattel  slaves  or  masters,  serfs  or  barons, 
wage  workers  or  capitalists.  All  had  equal  access  and 
right  of  access  to  the  resources  of  nature.  No  state  in- 
terposed its  strong  arm  to  maintain  any  one  in  ex- 
clusive ownership,  or  to  exclude  the  rest  of  mankind 
from  equal  participation.  The  form  of  society  of  those 
days  is  known  as  the  gentile  form,  and  our  ancestors  of 
those  days  were  then  known  as  gentiles.  The  society  of 
those  days  formed  about  the  interests  of  kinship,  center- 
ing in  the  gens  or  family. 

The  breaking  up  of  gentile  society  came  with  the 
coming  of  the  private  owner  and  his  exclusive  owner- 
ship of  nature,  and  the  things  of  nature  so  far  as  physi- 
cal force  could  support  and  maintain  the  claim  of  such 
exclusive  ownership,  and  bludgeon  the  rest  of  mankind 
into  a  recognition  thereof.  It  is  not  in  the  least  neces- 
sary to  indulge  in  any  discussion  as  to  whether  it  was 
right  or  wrong.  This  is  not  a  work  on  casuistry.  It 
were  equally  bootless  to  argue  as  to  whether  such  was 
a  necessary  course  of  human  progress  or  not. 

Clear  understanding  will  be  much  promoted  if  we 
keep  in  mind   that  the   expropriated  gentile   continued 

25 


26  WHY  THE  CAPITALIST? 

to  be  and  still  is  the  expropriated  gentile.  His  expro- 
priator has  appeared  in  many  guises  and  forms,  as  mon- 
arch, as  feudal  lord,  as  slave  owner,  as  landlord,  as  cap- 
italist, as  lord  and  master  over  all  nature  so  far  as  force 
can  exclude  the  gentile  from  the  resources  of  nature. 
Then,  by  means  of  the  advantage  the  expropriator  gained 
through  his  overlordship,  he  also  became  exploiter  co- 
ercing gentiles  to  work  and  produce  profits — surplus 
value — all  of  which  he  also  seizes.  Sometimes  he  is 
more  expropriator,  levying  tribute,  sometimes  he  is  more 
exploiter,  pretending  to  buy  labor — labor  power — and 
taking  profit  from  the  application  of  that  labor  power  to 
productive  work.  Sometimes  he  is  monarch,  sometimes 
feudal  lord,  sometimes  land  owner,  sometimes  magnate, 
sometimes  stockholder,  sometimes  bond  holder.  Some- 
times he  is  the  votary  of  war,  sometimes  he  masquer- 
ader  as  the  votary  of  peace.  Sometimes  he  is  brutally 
frank  and  direct,  sometimes,  and  more  often,  he  is  hypo- 
critical, insinuating  and  indirect.  But  he  has  always  one 
aim,  one  purpose,  one  object,  and  that  is  to  drag  to  him- 
self the  lion's  share,  to  rule,  to  dictate  to  the  gentiles 
the  lives  they  shall  live  and  the  extent  to  which  they 
might  live  their  lives.  His  rapacity  far  exceeds  his  ca- 
pacity and  its  only  limit  is  in  its  own  nature.  Profit 
from  the  labor  of  gentiles  can  only  be  realized  as  long  as 
the  gentile  can  labor,  and  to  labor  he  must  have  enough 
to  live  according  to  his  station  in  life,  reproduce  his  kind, 
and  generate  labor  power.  This  then  is  the  amount  which 
in  the  very  nature  of  things  needs  must  be  allowed  the 
producing  gentile.  This  is  the  natural  limit  of  exploita- 
tion. 

All  of  the  many  guises  and  forms  of  the  expropriator 
and  exploiter  present  seemingly  different  characters,  but 
these  differences  are  only  seeming,  only  skin  deep,  and 
only  deceptive,  like  the  different  colors  of  the  chameleon. 


THE   MORGAN  AND  THE  GENTILE  27 

There  is  one  essential  of  character  that  determines  his 
place  and  office. 

I  desire  a  word  to  serve  as  a  generic  name  of  this 
character.  The  advantages  that  will  result  from  such  a 
generalization  will  be  obvious.  I  shall  therefore  desig- 
nate this  character  of  characters  as  the  morgan,  and  will 
keep  him  where  he  belongs  in  a  class  all  by  himself,  he 
having  segregated  himself.  This  generic  name  is  not 
used  in  disrespect  but  entirely  as  a  uniform  designation 
for  description. 

The  gentiles  constitute  one  class,  namely  the  class  of 
the  expropriated.  This  class  has,  however,  been  driven 
into  different  divisions  again  by  the  artificial  conditions 
forced  upon  them  by  the  morgan's  institution  of  private 
property.  These  different  orders  of  the  same  class  have 
also  been  arrayed  against  each  other,  some  more,  some 
less,  in  an  artificially  created  antagonism  that  constantly 
redounds  to  the  benefit  of  the  morgan,  and  produces  the 
strongest  sort  of  a  prop  and  support  for  his  institutions. 

As  all  gentiles  have  been  expropriated  of  their  free 
and  equal  right  to  share  in  and  have  access  to  the  re- 
sources of  nature,  their  interest  in  this  respect  is  com- 
mon, and  when  understood  will  be  controlling.  Under 
the  resulting  forms  and  conditions  of  society,  from  the 
earliest  to  the  form  now  prevailing,  other  generated  in- 
terests, based  in  part  upon  needs  growing  out  of  the 
situation  and  in  part  upon  lack  of  understanding,  di- 
vided and  still  divides  the  gentiles  into  these  different 
orders.  These  respective  interests  of  the  different  orders 
of  the  gentile  class  were  and  are  seemingly,  but  only 
seemingly,  stronger  than  their  indicated  common  primary 
class  interest. 

The  class  of  society  which  we  shall  know  as  the  gen- 
tiles separates  itself  into  three  orders  based  upon  their 
respective  secondary  economic  interests.     The  lines  of 


28  WHY  THE  CAPITALIST? 

demarcation  are  not  always  sharply  defined  or  straight. 
They  are  very  often  vague  and  wavering,  and  there  is  a 
frequent  overlapping.  The  ingredients  of  a  cake  run 
into  and  impart  their  flavor  to  each  other.  Still  our 
palates  can  differentiate  between  the  taste  of  the  citron 
and  the  sugar  and  the  butter  and  the  eggs.  And  if  the 
cake  should  be  spoilt  by  rancid  butter  or  a  bad  egg  the 
discriminating  palate  can  soon  tell  the  cause  of  the 
trouble. 

The  first  of  the  gentile  orders  consists  of  those  gentiles 
who  bow  their  necks  to  the  morgan's  yoke  to  obtain 
their  livelihood  by  that  labor  which  affords  either  profits 
or  personal  service  to  the  morgan.  These,  besides  being 
expropriated  of  their  heritage  in  nature's  bounty,  and 
therefore  having  in  common  with  other  gentiles  a  pri- 
mary interest  hostile  to  that  of  the  morgan,  are  now  also 
exploited  of  all  that  they  produce  by  their  labor  save 
only  so  much  as  they  must  have  from  nature  and  the 
product  of  their  work  to  live  upon,  to  reproduce  their 
kind,  and  to  generate  more  labor  power  for  the  produc- 
tion of  more  value.  Here  then  is  a  secondary  economic 
interest  equally  as  hostile  as  the  primary  and  irrecon- 
cilable with  the  interests  of  the  morgan.  Those  gentiles 
who  become  personal  servants  and  menials  of  the  mor- 
gan produce  no  value  by  their  labor.  They  represent 
part  of  the  overplus  of  workers  that  are  excluded  from 
commodity  producing  work.  There  is  nothing  in  the  oc- 
cupation or  in  the  interest  of  either  of  these  seeming 
two  kinds  of  workers  that  can  make  them  otherwise 
than  of  one  order,  with  interests  alike  loyal  to  the  cause 
of  the  gentiles  and  hostile  to  the  morgan  and  his  insti- 
tutions. There  is  a  solidarity  of  interests,  though  the 
work  of  one  is  solely  to  produce  profits  and  that  of  the 
other  is  not  to  produce  any  profit  or  any  value,  except 
occasionally  and  incidentally.    They  belong  to  one  class 


QL 


a 


THE  MORGAN  AND  THE  GENTILE  29 

and  in  one  order.  They  are  the  wage  workers  and  their 
secondary  economic  interests  are  common.  I  shall  refer 
to  them  as  gentiles  of  the  first  order. 

The  second  order  of  gentiles  are  those  that  are  not 
wage  workers.  They  include  what  might  be  called  the 
adventurers  or  free  lances,  making  their  livelihood  by 
their  wits,  their  talent,  or  by  successful  infractions  of  the 
law  or  the  conventional  rules  and  precepts,  or  by  a  num- 
ber of  these  methods,  criminals,  prostitutes  and  unem- 
ployed. This  order  also  includes  those  who  are  not 
wholly  and  completely  expropriated,  but  have  yet  hold 
and  control  of  some  small  part  of  nature's  resources  and 
means  of  production;  such  as  small  farmers,  small  man- 
ufacturers, small  merchants  and  the  like ;  that  body  of 
gentiles  still  who  are  not  possessed  of  enough  to  enable 
them  to  live  upon  the  labor  of  others,  but  who  have 
enough  partly  to  offset  in  more  or  less  degree  the  disad- 
vantages of  their  expropriation  by  the  morgan,  and  to 
help  them,  so  to  speak,  to  get  somewhat  better  returns 
from  their  own  labor.  The  effect  of  their  expropriation 
by  the  morgan  is  not  so  complete  and  therefore  they 
also  escape  exploitation  in  about  the  same  measure. 
Their  position  as  an  order  is  constantly  being  assailed 
by  the  morgan.  His  forces  are  continually  pressing 
them  toward  the  gentiles  of  the  first  order,  driving  them 
into  the  ranks  of  the  wage  workers.  The  problem  of  the 
gentiles  of  the  second  order  is  always  to  know  how  to 
escape  such  a  fate. 

The  third  order  of  gentiles  are  comparable  to  the  mer- 
cenary soldier  fighting  on  the  side  of  a  usurper  and 
against  his  own  people.  They  constitute  the  morgan's 
physical  and  intellectual  police. 

The  morgan,  however,  is  always  in  one  class  by  him- 
self. Whether  monarch,  baron,  landlord,  merchant,  mine 
owner,   railroad   owner,  banker,    factory    owner,    farm 


30  WHY  THE  CAPITALIST? 

owner,  or  what  not.  He  is  always  and  all  the  time  ex- 
propriator and  exploiter.  These  two  phases  of  the  mor- 
gan's operations  must,  however,  be  kept  clearly  separ- 
ated. As  expropriator  the  morgan  excludes  the  gentiles 
from  partaking  of  the  free  goods  that  nature  has  pro- 
vided. He  claims  exclusive  ownership  of  all  the  free 
goods.  This  gives  him  the  power  to  impose  terms  of  life 
upon  the  gentiles.  The  morgan's  terms  are  that  besides 
tax  or  tribute  or  rent  he  be  given  personal  service  or 
profits  in  such  manner  and  form  and  in  such  measure 
as  his  fancy  dictates.  This  profit  aside  from  what  na- 
ture gives  us,  comes  and  only  can  come  from  values 
produced  by  the  expenditure  of  labor  power,  and  is 
measured  in  amount  by  the  difference  between  the 
amount  that  the  working  gentile  and  nature  produces 
and  the  amount  of  the  actual  necessaries  of  life  required 
by  the  producing  gentile  that  he  may  produce  and  ex- 
pend labor  power  and  propagate. 

The  morgan  decrees  that  so  many  of  the  gentiles  as 
he  finds  can  be  advantageously  employed  under  his 
methods  be  kept  busy  at  value  producing  work,  supple- 
menting nature  in  producing  and  augmenting  the  supply 
of  the  material  necessaries  of  life.  Without  scientific 
basis  or  estimate  as  to  quantities  required,  the  gentiles 
so  employed  are  driven  to  produce  and  do  produce,  in 
rough  measure,  by  adding  to  what  nature  volunteers,  so 
much  as  the  maintenance  of  human  life  and  the  morgan- 
dominated  society  requires.  The  relative  number  of  the 
gentiles  who  are  workers  so  employed  at  established  oc- 
cupations, as  compared  with  the  rest  of  the  gentiles  and 
as  compared  with  the  amount  produced  is  constantly 
growing  smaller.  This  is  owing  to  improved  methods 
of  production  evolved  and  applied  by  the  intelligence  of 
the  gentiles  themselves,  and  owing  to  the  invention  also 
by  the  gentiles  of  machinery  that  multiplies  many  times 


THE   MORGAN  AND  THE  GENTILE  31 

the  volume  of  production,  all  reducing  the  proportionate 
number  of  the  gentiles  needed  at  productive  work.  The 
morgan  benignly  welcomes  and  accepts  all  these  im- 
provements and  permits  them  to  be  applied  as  fast  as  he 
can  see  that  his  interests  as  a  morgan  are  advanced 
thereby.  His  interests  are  always  advanced  by  the  pro- 
duction of  the  largest  possible  volume  with  the  least  pos- 
sible number  of  workers.  This  leaves  him  the  largest 
amount  of  surplus  after  the  workers  get  the  portion 
necessary  for  their  keep. 

The  morgan  consumes  an  enormous  amount  of  the 
surplus,  for  he  and  his  horde  feed  and  squander  pro- 
digiously. He  gets  yachts,  limousines,  palaces,  country 
seats,  hunting  parks,  etc.,  etc.  The  important  thing  to 
the  morgan  is  then  to  exchange  the  still  remaining  sur- 
plus in  such  manner  as  to  he  to  his  greatest  advantage 
in  extending  his  power  and  sphere  of  influence  still  fur- 
ther. The  only  person  with  whom  the  morgan  can  ex- 
change the  residue  of  these  products,  ultimately,  are  gen- 
tiles. For  these  constitute  the  remaining  great  body  of  con- 
sumers. 

The  gentiles  not  employed  for  wages  either  in  value 
producing  work  or  in  work  of  personal  service  or  attend- 
ance and  therefore  not  also  exploited  as  wage  workers,  I 
designate  herein  as  gentiles  of  the  second  order. 

The  number  of  these  gentiles  of  the  second  order  is 
large  and  ever  growing  relatively  larger.  Their  rapid 
growth  results  from  improvements  in  the  methods  and 
machinery  of  productive  industry.  Many  of  the  gentiles 
of  the  first  order  are  taken  up  in  the  production  of  pure 
luxuries  for  the  morgan,  others  in  occupations  that  have 
only  one  purpose  and  that  is  to  produce  further  means, 
conditions  and  circumstances  to  continue  the  morgan  in 
power.  With  all  of  the  gentiles  of  the  second  order  the 
aim  and  end  is  not  to  produce  any  real  values,  but  to  get 


32  WHY  THE  CAPITALIST? 

something  that  will  enable  them  by  hook  or  by  crook  to 
squeeze  in  and  get  a  fresh  hold  by  which  to  hang  on  to 
life.  Yet,  and  in  spite  of  everything,  this  ever  growing 
army  is  constantly  pressing  in  every  direction  for  place 
and  opportunity  and  is  constantly  growing  both  in  num- 
ber and  importance.  A  large  proportion  of  its  members 
is  always  fluctuating  back  and  forth  from  and  to  the  other 
orders,  particularly  from  and  to  the  wage  working  order, 
the  gentiles  of  the  first  order.  It  is  historically  a  revolu- 
itonary  order  and  contains  within  it  now  most  potent 
germs  of  hostility  to  the  morgan. 

The  gentiles  of  this  second  order  may  be  called  ad- 
venturers, innovators,  also  the  loose  and  vicious,  all  im- 
patient of  restraint  or  privation.  Whatever  their  out- 
ward show  or  mien,  they  have  no  respect  for  the  mor- 
gan's law,  or  his  theological  or  moral  precepts.  They 
have  an  unconquerable  aversion  to  the  wearing  of  the 
morgan's  yoke,  in  fact  their  aversion  to  that  is  so  great 
that  they  avoid  as  much  as  they  can  all  of  the  occupa- 
tions of  the  wage  worker.  The  lives  of  all  the  gentiles 
in  this  order  whether  they  will  or  no,  or  are  conscious 
of  it  or  not,  might  be  said  to  be  one  continuous  active 
protest.  This  order  embraces  the  violators  of  the  laws 
relating  to  property,  the  gamblers,  the  speculators,  the 
prostitutes,  the  hucksters,  the  brokers,  the  promoters, 
the  doctors  of  medicine,  the  artists  not  yet  wage  work- 
ers, lawyers,  some  teachers  and  some  authors. 

Turpitude,  of  course,  does  not  come  into  consideration 
in  making  this  classification.  Those  in  this  second  order 
do  not  as  a  rule  come  necessarily  under  the  mental  or 
''moral"  sway  that  works  for  the  perpetuation  of  the 
morgan's  power.  Their  only  interest  in  the  present 
state,  its  laws,  its  ethics,  its  commandments,  its  morals 
or  religion  is  to  avail  themselves  of  any  advantages  by 
which  they  might  slip  into  easier  situations  and  to  avoid 


THE  MORGAN  AND  THE  GENTILE  33 

any  adverse  effect  upon  themselves.  They  give  outward 
obedience,  often  ostentatiously,  so  far  as  they  find  it 
necessary  or  profitable.  Though  they  would  also  ex- 
propriate and  exploit,  and  some  of  them  do,  the  return 
they  get  is  not  clear  profit.  It  is  intermingled  with  the 
product  of  the  expenditure  of  their  own  labor  power, 
and  often  not  amounting  to  as  much  in  volume  as  their 
just  share  of  what  nature  yields,  plus  their  own  added 
labor.  And  of  that  which  passes  to  them,  a  relatively 
small  portion  remains  with  them.  A  great  part  of  it 
passes  through  their  hands  as  grain  passes  through  the 
hopper  of  a  mill  and  goes  on  further  to  heap  up  the 
measure  of  the  morgan.  Masked  and  devious  though  the 
process  may  be,  yet  nevertheless  and  notwithstanding, 
is  it  true  that  there  are  those  of  the  second  class  of  gen- 
tiles who  can  truthfully  say  that  their  talent,  education, 
experience,  personal  attention  and  industry  outside  of 
their  natural  right  to  share  in  nature's  bounties,  consti- 
tutes a  legitimate  and  adequate  consideration  for  what 
they  have  of  life,  after  they  in  their  turn  have  had  the 
juice  of  taxes,  tribute  and  pure  profits  squeezed  out  of 
them  by  the  mill  of  business  that  finally  transmits  to  the 
morgan  all  that  is  transmittable.  Yet  these  gentiles  are 
forced  to  parade  in  contaminated  plumes.  They  are  not 
permitted  even  the  good  name  of  receiving  their  earned 
portions  as  compensation.  They  are  compelled  to  take 
their  compensation  under  the  smirching  name  of  profits. 
The  line  of  demarcation  between  the  compensation  and 
the  pure  profits  that  these  gentiles  of  the  second  order 
get  is  vague  and  wavering  because  no  measure  and  no 
figures  are  available.  But  this  is  sure,  that  the  amount 
produced  per  person  engaged  in  productive  industry  is 
constantly  increasing.  Therefore  the  opportunities  to 
engage  in  productive  industry  are  constantly  decreas- 
ing.   Another  thing  is  sure  and  that  is  that  the  demands 


34  WHY  THE  CAPITALIST? 

of  the  Morgan  upon  the  gentiles  of  the  second  order  ex- 
erted by  the  invisible  and  irresistable  pull  of  the  ma- 
chinery of  business,  are  and  for  a  long  time  have  been, 
and  in  the  very  nature  of  things  will  continue  to  be  grow- 
ing more  and  more  exacting;  and  that  as  to  these  gentiles 
of  the  second  order,  the  prospects  for  pure  profits  are 
fast  vanishing.  Not  only  have  their  chances  for  climbing 
into  the  morgan  class  been  growing  slimmer  all  the 
time,  but  the  pressure  the  other  way  is  constantly  grow- 
ing greater  and  it  is  only  a  question  of  time  when  they 
Avill  all  be  driven  to  the  wage  working  order  among  the 
gentiles  of  the  first  order,  there  to  find  that  no  more 
hands  are  wanted  because  those  already  employed  are 
able  with  the  machinery  and  modern  methods  to  pro- 
duce all  and  more  than  all  that  is  required.  Many  art- 
ists and  many  members  of  the  professions,  lawyers,  doc- 
tors, engineers,  are  already  there,  and  the  stream  of 
those  on  the  way  is  constantly  growing  in  volume. 

The  greatest  flux  and  mutation  is  found  in  this  second 
order  of  gentiles,  embracing  as  it  does  the  adventurers 
and  free  lances.  They  and  the  wage  slaves  have,  how* 
ever,  a  solidarity  of  interests.  They  are  both  despoiled, 
expropriated,  by  the  morgan  of  their  heritage  in  nature's 
resources.  Neither  of  them  are  necessarily  or  by  their 
station  in  life  tied  up  to  mentally  or  morally  support 
the  morgan's  system  of  state,  laws  or  religious  com- 
mandments. Their  primary  economic  interests  as  gentiles 
are  common  as  against  the  morgan.  It  is  with  them  only 
a  matter  of  education  and  consciousness.  The  only  un- 
likeness  between  them  is  that  the  wage  worker  is  also 
exploited  as  a  wage  worker,  and  the  gentile  of  the  sec- 
ond order  is  not. 

The  third  great  division  or  order  of  the  gentiles  con- 
stitutes the  mercenary  forces  of  the  morgan  to  keep  him- 
self on  his  throne  and  the  gentiles  in  subjection.     They 


THE  MORGAN  AND  THE  GENTILE  35 

furnish  the  craft  and  cunning,  likewise  the  physical  force 
to  keep  up  and  support  the  morgan's  estate.  The  first 
of  these  in  importance  at  present  is  the  law  pack.  They 
are  the  law  makers,  the  legislators,  the  judges,  the  law- 
yers, the  detectives,  the  sheriffs,  the  police,  the  military. 
These  devote  their  lives  and  energies  to  serving  the 
morgan  in  keeping  up  his  estate,  most  of  them  believ- 
ing in  a  beclouded  sort  of  a  way — for  they  are  not  clear 
on  anything — that  it  is  the  gentile's  state,  and  that  the 
gentile's  interests  and  the  morgan's  interests  are  identi- 
cal in  the  maintenance  of  this  state.  The  law  makers — 
I  mean  here  the  legislators,  the  judges  and  the  lawyers — 
in  the  main  echo  only  the  laws  that  are  dictated  by  the 
morgan ;  if  not  by  him  personally,  then,  by  his  inter- 
ests, whether  visible  or  invisible.  The  tardy  and  halting 
labor  laws  of  the  last  few  decades  or  so,  have  only  been 
so  many  sops  thrown  to  a  snarling  cerberus. 

The  state  as  at  present  constituted  has  but  one  aim 
and  purpose  and  that  to  make  secure  the  morgan.  That 
purpose  is  subserved  in  an  immeasurable  degree  by  the 
show  of  legality  and  hollow  pretense  of  right,  given 
to  the  morgan's  possession  of  that  which  is  not  his  and 
which  in  the  nature  of  things  cannot  be  his.  The  judges 
interpret  the  law  with  a  wonderful  display  of  mock  wis- 
dom, always  straining  and  striving  to  serve  interests, 
which  in  their  essence  are  the  interests  of  the  morgan. 
They  supplement  the  efforts  of  the  legislature,  and  by 
means  of  interpretation,  supply  and  read  into  enacted 
laws  any  omission  of  the  legislature,  to  buttress  the 
morgan's  institution. 

The  body  of  the  lawyers,  in  the  main,  keep  up  a  con- 
stant chatter  over  the  mine  and  the  thine  of  things,  twist- 
ing and  squirming  to  bring  this  side  or  that  side  of  an 
individual  claim  either  within  or  without  the  terms  of 
legislative    enactments    and    judge-made    laws.      These 


36  WHY  THE  CAPITALIST? 

lawyers  thereby  and  in  the  meantime  are  always  stand- 
ing firmly  for  the  morgan's  system  of  laws,  always 
supporting  it  with  all  kinds  and  manner  of  shifts,  fic- 
tions and  chicanery.  The  whole  of  their  so-called  talent 
is  devoted  to  keeping  the  gentile  mind  in  such  a  whirl 
as  not  to  leave  it  time  or  opportunity  for  calm  reflection 
upon  the  institution  and  the  society  that  this  junk  heap 
is  designed  to  support  and  perpetuate. 

Very  few  lawyers  have  the  slightest  idea  of  their  true 
position.  Practically  all  of  them  will  indignantly  deny 
all  that  is  here  stated  and  they  will  in  good  faith  deny 
it.  But  lawyers'  minds  have  become  so  warped  and 
artificialized  that,  with  rare  exceptions,  they  cannot 
grasp  social  or  economic  questions  or  situations.  The 
vast  majority  of  lawyers  are  honest  in  the  belief  in  and 
in  support  of  the  existing  legal  system.  They  are  by 
their  faith  rendered  so  much  more  serviceable,  in  truth 
indispensable,  to  the  morgan.  The  lawyers  may  even 
rail  at  the  morgan,  try  to  invoke  the  law  against  the 
morgan,  even  refuse  to  stand  where  the  morgan  might 
see  and  bestow  favors.  That  is  not  of  the  slightest  im- 
portance. So  long  as  the  lawyer  stands  for  a  system  of 
laws  that  sustains  the  present  theory  of  private  property, 
he  is  the  morgan's  true  and  faithful  servant.  Witness 
the  ludicrous  trust  prosecutions  by  the  United  States 
government  lawyers ;  of  the  greatest  benefit  to  the  mor- 
gan, and  a  veritable  stuffed-club  and  slap-stick  perform- 
ance, by  which  the  gentiles  including  the  lawyers  are 
fooled. 

The  sheriff,  the  policeman,  the  soldier  and  the  man- 
o'-warsman  merely  represent  the  brute  force  always  held 
in  readiness  to  enforce  the  morgan's  law.  They  are  the 
bludgeon  and  constitute  the  morgan's  last  argument,  put 
forth  in  the  name  and  guise  of  what  is  claimed  to  be  a 
just   and   impartial   state. 


THE  MORGAN  AND  THE  GENTILE  37 

All  of  the  state  lackeys  of  the  morgan  and  all  of  their 
machinery  of  government  have  but  one  office  and  pur- 
pose and  that  is  to  keep  the  morgan  secure  in  exclusive 
possession  and  control  of  the  resources  of  nature,  the 
instruments  of  production  and  heaps  of  accumulated 
profits.  It  is  their  office  to  maintain  the  status  quo. 
This  is  called  the  state  and  is  paraded  as  the  gentiles' 
state.  In  truth,  it  is  the  morgan's  estate.  The  gentiles 
so  serving  the  morgan  in  his  estate  are  required  to  be- 
lieve and  to  make  the  other  gentiles  believe  that  this  is 
a  state  for  the  benefit  of  the  gentiles,  that  the  gentiles 
need  this  state  for  their  protection.  Here  the  gentiles' 
natural  instinct  of  self-preservation  is  played  upon  and 
exploited  to  the  fullest.  He  is  made  to  believe  that  he  is 
in  need  of  a  strong  government  from  above  to  protect 
and  preserve  his  life  and  home,  and  that  the  strong  gov- 
ernment and  protection  is  only  to  be  had  from  the  state 
as  at  present  constituted. 

The  real  need  of  the  gentile  for  this  sort  of  protection 
is  about  of  the  same  extent  and  nature  as  was  the  serf's 
need  for  the  protection  given  him  by  the  baron  in  feudal 
times.  What  he  needs  is  to  find  a  way  to  shield  himself 
from  his  protector.  The  condition  of  the  serf  which 
made  him  need  the  protection  of  the  baron  was  the  con- 
dition imposed  by  the  baron.  Outside  of  that  the  need 
of  the  serf  for  protection  was  small.  Such  needed  pro- 
tection as  he  did  get  was  meagre,  inferior  and  dearly 
paid  for.  His  protection  was  merely  incidental  and  of 
such  a  form  and  measure  as  was  necessary  only  to 
maintain  and  support  the  estate,  standing  and  "dignity*' 
of  the  baron.  That  is  exactly  the  sort  of  measure  of  pro- 
tection that  the  gentiles  get  under  the  morgan's  modern 
form  of  society  and  state. 

The  purpose  of  the  state  is  to  keep  the  morgan  in  pos- 
session and  power,  and  to  hold  the  gentiles  in  subjec- 


38  WHY  THE  CAPITALIST? 

lion.  Protection  is  forced  upon  the  gentile  by  his  despoil- 
ment and  in  its  very  nature  is  all  for  the  morgan  as 
against  the  gentile,  and  none  for  the  gentile  as  against 
the  morgan.  It  is  all  to  maintain  the  status  quo,  in  other 
words,  to  maintain  the  morgan  on  top.  The  minor  con- 
troversies that  the  gentiles  have  with  each  other  grow 
principally  out  of  their  condition  of  subjection  and  re- 
sulting irritation.  These  sorry  controversies  are  taken 
into  the  courts  of  the  morgan's  state  for  adjudication. 
The  great  show  of  blindfolded  justice  is  merely  inci- 
dental to  and  in  furtherance  of  the  principal  and  only 
office  and  purpose  of  the  state,  to  keep  the  morgan  tight 
in  control  and  possession.  These  adjudications  and 
court  proceedings  only  give  more  prestige  and  standing 
to  the  morgan's  estate.  The  gentile  is  impressed  with 
a  respect  and  an  awe  for  the  morgan's  state,  the  true  na- 
ture of  which  is  concealed  beneath  much  tinsel  and 
trumpery.  All  of  this  strengthens  the  state  and  the 
estate  of  the  Morgan. 

The  remainder  of  the  morgan's  mercenary  forces  are 
the  panders,  sycophants  and  intellectual  police,  consisting 
of  theologians,  writers  and  teachers,  who  preach  to  and 
teach  the  expropriated  gentile  that  he  must  not  covet  any 
of  the  things  that  the  morgan  has  expropriated  him  of, 
any  of  the  things  that  nature  supplied  for  him  and  which 
the  morgan  with  the  power  of  the  state  has  seized  and 
holds;  not  to  covet  any  of  the  morgan's  pile,  accumu- 
lated by  exploitation;  that  he,  the  gentile,  must  not  steal 
any  of  his  own  from  the  morgan ;  that  he,  the  gentile, 
must  love,  embrace  and  respect  all  of  the  morgan's  im- 
posed creeds  and  precepts ;  that  he,  the  gentile,  must  be 
humble,  meek,  poor  in  spirit  and  always  industrious;  that 
he,  the  gentile,  must  be  contented  with  his  lot  in  life; 
that  he,  the  gentile,  must  be  loyal  and  patriotic,  willing 
and  anxious  at  all  times  to  fight  for  the  state  in  the  wars 


THE  MORGAN  AND  THE  GENTILE  39 

that  it  wages  for  the  furtherance  and  permanence  of  the 
morgan's  estate  at  home  and  in  other  fields  and  regions ; 
that  he,  the  gentile,  must  have  an  unbounded  faith  and 
enthusiasm  for  the  state  of  the  morgan  and  with  which 
the  morgan  expropriates  him  of  everything  expropriate. 

Here,  too,  the  morgan  avails  himself  of  and  profits  by 
the  wiles  and  arts  of  false  teachers  and  preachers.  That 
by  far  the  most  of  these  are  also  sincere  and  honest,  and 
have  been  deluded  by  a  mass  of  errors,  assumptions  and 
miseducation  does  not  effect  the  result,  except  to  make 
it  more  assured  and  effective.  It  makes  these  servitor's 
also,  all  the  more  serviceable  to  the  morgan  and  his 
estate. 

Our  ancestors  have  always  found  solace  and  comfort 
in  religion  for  all  their  limitations  and  want  of  under- 
standing. Religion  was  the  result  of  the  natural  strug- 
gle of  the  mind  to  know.  The  true  domain  of  religion 
has  always  been  the  unknown.  It  was  the  presumed  ex- 
planation of  phonomena.  It  constituted  the  theory  of 
the  universe.  There  was  one  belief  common  to  most 
religions,  and  that  was  the  belief  in  some  kind  of  a  future 
life  and  in  some  kind  of  a  place  of  future  abode.  This 
was  a  conclusion  drawn  from  the  phenomena  which 
nature  always  presented  and  for  which  man  had  no 
scientific  explanation. 

The  morgan,  through  the  craft  and  cunning  of  servi- 
tors, seized  religion  at  an  early  stage  and  superimposed 
upon  it  an  elaborate  system  of  precepts  and  moral  rules 
so-called.  These,  with  a  liberal  use  of  postulates,  have 
always  been  promulgated  as  of  divine  origin  and  as 
having  been  especially  revealed  to  a  few  favored  by  a 
direct  or  an  indirect  communication  from  some  divinity. 
These  commandments  all  had,  have  and  can  have  but 
one  main  and  real  purpose  and  office.  That  purpose 
and  office  was  and   is   to  entrench  the  morgan  in  his 


40  WHY  THE  CAPITALIST? 

power  of  excluding  the  gentiles  from  that  which  always 
has  been  and  in  the  nature  of  things  is  still  theirs  for 
common  use  and  enjoyment.  This  real  purpose  and 
office  has  always  been  concealed  under  a  mass  of  ver- 
biage. This  verbiage  had  two  noteworthy  qualities,  the 
one  was  that  it  led  the  gentile  mind  off  into  the  jungle  of 
inconsequential  controversies  over  matters  theological; 
the  other  was  that  it  would  make  it  appear  that  the  di- 
vinity was  especially  concerned  about  the  shortsighted, 
fretful  and  childish  disputes  of  the  expropriated  gen- 
tiles. These  two  qualities  won  favor  and  made  the 
masked  battery  a  complete  and  perfect  instrument  in  the 
hands  of  the  morgan.  The  little  pilferings  and  bicker- 
ings of  the  expropriated  gentiles  among  themselves, 
growing  out  of  conditions  caused  by  their  expropriation 
and  exploitation,  and  as  nothing,  and  ludicrously  petty, 
compared  to  the  general  common  despoilment,  kept  and 
keeps  the  gentiles  busily  engaged  with  petty  internal 
dissensions. 

"Thou  shalt  not  covet"  is  the  quintessence  and  ex- 
presses the  purpose  of  all  the  so-called  divinely  revealed 
commandments.  The  despoiled  gentiles  never  have  had 
anything  of  moment  to  covet.  The  morgan  always  has 
been,  since  his  reign  began,  in  exclusive  possession  of 
all  that  can  to  any  considerable  degree  arouse  feelings 
of  covetousness. 

The  violation  by  a  gentile  of  any  of  the  laws  or  com- 
mandments securing  the  morgan's  property  rights  in 
things  that  in  the  very  nature  of  things  cannot  be  his, 
if  smelt  out  by  the  ferrets  of  the  law,  bring  down  upon 
the  gentile's  unconsecrated  head  all  of  the  clubs  of  the 
morgan's  state.  If  the  ferrets  cannot  smell  them  out 
then  the  offending  gentile  is  left  to  the  torments  of  a 
mind  filled  with  the  terror  of  burning  lakes  in  the  here- 
after, and   the  plague  of  a  conscience  artificially  ren- 


THE  MORGAN  AND  THE  GENTILE  41 

dered  sore  and  over  tender  by  the  morgan's  spiritual 
policemen. 

The  present  state  with  all  its  laws  has  never  had  any 
restraining  influence  upon  the  morgan's  predatory  dispo- 
sition. That  is  not  their  purpose.  Their  purpose  is  to 
serve  the  morgan  and  his  estate.  For  the  divine  com- 
mandments directed  primarily  against  all  covetousness, 
the  morgan  has  only  deaf  ears.  The  restraining  in- 
fluence is  only  for  the  expropriated  gentile. 

The  third  order  of  gentiles  maintains  itself  largely  by 
filching  and  wheedling  from  the  other  gentiles  a  part  of 
the  little  that  they  have.  Like  the  mercenary  army  of 
the  usurping  invader,  they  live  off  the  subjugated  popu- 
lace so  far  as  they  can.  The  morgan,  so  far  as  he  con- 
siders it  expedient  and  worth  the  cost,  supplies  his  mer- 
cenaries with  so  much  of  their  material  needs  and  cam- 
paign material  as  they  are  unable  to  get  by  foraging. 
He  does  not  do  this  directly  or  in  a  way  that  the  ordinary 
busy  gentiles  notice  and  understand.  He  always  chooses 
the  indirect  and  for  him  more  efficacious  method,  ever 
riveting  the  shackles  tighter.  He  endows  their  colleges, 
gives  liberally  to  their  churches,  supports  their  traffic  in 
charity,  furnishes  money  for  their  missionary  commerce, 
finances  their  "onward  movements^"  creates  pension 
funds  for  them.  He  builds  libraries  where  their  con- 
ventional and  mind-destroying  drivel,  under  the  guise 
of  literature  is  advertised  and  pushed  like  bargain- 
counter  goods.  He  patronizes  literature  and  art  to  en- 
slave and  debase  them  to  his  service.  He  has  his  agents 
to  scour  the  world,  and  through  the  power  of  money 
to  rob  every  town  and  hamlet  of  its  art  treasures,  de- 
priving its  people  of  the  refining  influence  of  the  pres- 
ence and  the  traditions  attached  to  works  of  art.  He  has 
the  plunder  dragged  together  into  huge  mausoleums 
where  a  comparatively  few,  and  these  his  mercenaries 


42  WHY  THE  CAPITALIST? 

for  the  most  part,  can  stare  at  them.  The  effect  upon 
the  many  regions  and  localities  looted  is  of  course  de- 
vastating and  depressing.  On  the  other  hand  we  see  a 
concentration  of  the  treasures  so  that  they  too  are  com- 
pelled to  compete  with  each  other  for  incompetent  at- 
tention. They  look  like  pieces  of  homesick  stone  and 
bronze,  each  one  robbed  of  its  native  setting  and  atmos- 
phere, catalogued,  to  be  vacantly  gazed  at  by  surfeited 
sightseers. 

All  of  this  is  cried  forth  by  the  claque  as  a  patron- 
izing of  art.  The  once  highly  prized  gems  of  art  might 
almost  as  well  be  displayed  at  the  pawn  broker's,  or 
at  the  junk  dealer's  shop.  But  it  serves  the  morgan's 
purpose.  It  fills  the  mouths  of  his  mercenaries  with 
false  and  fulsome  praise  of  the  morgan  as  a  connoisseur, 
to  imprss  the  gullible  gentile.  It  serves  as  still  another 
means  to  make  the  gentile  believe  that  the  morgan  is  a 
benefactor  of  his  race,  and  so  helps  to  conceal  the  curse. 


CHAPTER  III. 
THE  MORGAN'S  REACH. 

The  more  primitive  the  mind,  the  more  it  confines 
itself  to  efforts  at  adjustment  to  immediate  environ- 
ments, and  the  less  capable  it  is  to  cope  with  the  problem 
of  changing  the  environment,  in  fact  the  less  idea  it  has 
that  there  is  such  a  problem  or  that  environments  might 
be  changed.  The  primitive  mind  finds  it  most  difficult 
to  think  beyond  its  immediate  physical  and  perceptive 
surroundings.  It  encounters  great  difficulty  in  seeing 
or  inferring  the  existence  of  things  and  influences  be- 
yond the  conscious  physical  senses,  though  they  affect 
most  potently  our  surroundings.  Most  minds  cannot 
without  great%fc  difficulty  comprehend  the  unsensed  forces 
that  influence  our  lives. 

The  fish  in  the  ocean  is  constantly  engaged  in  adjust- 
ing itself  to  its  environments.  That  fish,  however,  has 
no  conception  of  the  thermal  currents  that  vitally  in- 
fluence its  life  and  determine  its  habitat,  nor  has  it  any 
idea  of  the  amount  of  water  pressure  required  for  its 
life,  nor  of  the  composition  of  the  water  in  which  it  lives; 
nor  of  the  extent  or  volume  of  the  ocean  in  which  it  has 
its  being. 

The  untutored  man  does  not  know  that  air  is  a  ma- 
terial substance  or  that  it  exerts  a  pressure  of  about 
thirteen  pounds  upon  every  square  inch  of  his  body. 
He  has  not  the  remotest  idea  of  gravitation,  or  of  its 
effect  upon  his  life.  The  most  important  influence  on  his 
life,  the  things  that  form  and  make  his  environment  are 
completely  non-existent  to  him  because  he  has  always 
confined  his  mentality  to  the  adjustment  of  himself  to  his 

43 


44  WHY  THE  CAPITALIST? 

environment,  and  never  looked  beyond  to  learn  of  the 
things  that  shape  and  influence  his  environment.  The 
wider  the  scope  and  the  greater  the  effect  of  the  non- 
prehensible  things  affecting  our  lives,  the  less  conscious 
of  them  are  we  likely  to  be. 

But,  for  those  of  us  who  go  out  to  explore  the  field 
of  political  economy  to  find  the  things  that  make  our 
environment,  there  are  many  surprising  and  wonderful 
revelations  in  store. 

The  understanding  fairly  reels  when  it  begins  to  con- 
template the  far-reaching  effects  and  stupendous  results 
of  the  expropriation  of  the  gentiles  by  the  morgan. 

We  are  accustomed  to  think  only  of  the  physical, 
concrete  things,  when  considering  matters  relating  to 
political  e%j^m}\  But  the  many  things  corporeal,  the 
beneficial  teredifiiricntG,  non-prehensible  goods,  that  vast 
volume  of  mental  treasure  accumulated  through  the 
ages;  the  things  not  material  that  yet  go  with  and  can- 
not be  without  the  material,  and  that  give  to  the  ma- 
terial an  enhancement  of  usefulness  so  great  as  to  be 
beyond  the  power  of  mind  fairly  to  contemplate  all  of 
this  wealth  often  outweighs  in  importance  the  material 
and  prehensible,  though  it  arises  from,  rests  upon  and 
depends  upon  the  latter  for  its  very  existence  and  sup- 
port, much  as  a  house  often  has  to-day  a  much  greater 
attributed  value  than  the  land  upon  which  it  is  built. 

The  whole  of  this  vast  empire  of  wealth  goes  with 
ownership  and  private  possession  of  the  material  fur- 
nished by  nature  and  rendered  valuable  by  human  labor, 
and  it  goes  that  way  without  being  even  mentioned 
or  noticed.  Under  our  system  of  miseducation,  the 
gentile  mind  is  even  led  to  believe  that  the  gentile  re- 
rrmins  the  possessor  of  all  this  incorporeal  wealth.  In 
truth  the  gentile  no  more  possesses  it  than  the  engineer 


the  morgan's  reach  45 

possesses  the  locomotive  or  the  trained  workhorse  pos- 
sesses the  harness  and  wagon. 

Not  any  of  that  great  wealth  of  intangible  gifts  rep* 
resenting  the  work,  enlightenment,  education  and  in- 
ventive activities  of  our  ancestors,  all  of  which  add  such 
vast  amounts  to  the  material  wealth  of  the  race  and-  of 
the  world  is  at  present  possessed  by  the  gentiles.  With- 
out owning  the  ships,  these  gentiles  .can  not  own  any 
part  of  the  benefits  that  result  from  the  invention  of  the 
compass  or  the  development  of  the  science  of  navigation 
by  our  ancestors ;  without  owning  the  railroads,  mines 
or  mills,  they  cannot  own  any  of  the  benefits  that  result 
from  the  many  inventions  and  discoveries  of  our  an- 
cestors or  those  of  which  patent  rights  have  expired. 
Archimedes,  Watt,  Stephenson,  Arkwright,  Whitney, 
Fulton,  Morse,  Howe  and  a  host  of  others  might  just  as 
well  never  have  lived. 

The  man  who  does  not  own  the  means  of  applying 
can  have  no  ownership  in  steam  power,  electric  power, 
water  power;  nor  can  he  apply  the  principles  of 
mechanics  or  the  laws  or  science  of  chemistry  or  mathe- 
matics. The  thorough  understanding  of  these  intangible 
things  that  are  not  included  by  the  census  man,  does 
not  give  the  despoiled  gentile  any  ownership  in  them. 
All  that  his  education  gives  him  is  at  most  a  chance 
to  use  his  thus  acquired  greater  labor  power  for  the 
greater  power,  dominion  and  advantage  of  the  morgan, 
still  to  receive  only  enough  to  live  according  to  his 
station  in  society,  reproduce  his  kind  and  generate  more 
labor  power.  The  gentile  would  have  practically  as 
much  in  a  state  of  savagery  with  all  these  powers  and 
resources  of  nature  entirely  unknown.  He  is  like  the 
expert  horseman  who  does  not  own  a  horse.  His  ex- 
perience is  not  his  own  to  use.  All  that  he  can  do  with 
it  is  to  place  it  at  the  disposal  of  the  man  who  owns 


46  WHY  THE  CAPITALIST? 

the  horse,  to  get  in  return  merely  enough  of  that  which 
in  truth  is  already  his  own  to  live  upon. 

A  man  who  designs  an  improvement  for  a  steamship 
or  for  a  railroad  or  a  mine  or  for  a  rolling-mill  cannot 
use  it  because  he  does  not  own  a  steamship  or  a  rail- 
road or  a  rolling-mill.  He  is  entirely  dependent  upon 
being  able  to  induce  the  morgan  owning  the  steamship, 
the  railroad  or  the  rolling-mill  to  accept  the  use  of  it. 
He  is  like  the  wolf  in  the  fable  at  the  banquet  arranged 
by  the  stork.  The  delicious  viands  were  there,  but  they 
were  in  the  stork's  tall  jars.  The  wolf  could  not  get  his 
muzzle  into  the  jars,  and  as  his  great  respect  for  stork 
proprieties  kept  him  from  knocking  over  the  incumber- 
ing dishes,  he  had  to  content  himself  with  a  smell  of 
the  good  things.  What  a  mockery  it  is  then,  to  say  that 
a  man  owns  a  thing  that  he  cannot  make  any  use  of 
for  himself,  or  derive  any  direct  benefit  from,  and  only 
such  indirect  benefit  as  the  owner  of  the  means  of  doing 
so  allows. 

The  owner  of  the  means  is  to  all  intents  and  purposes 
the  owner  of  the  end.  The  morgan  who  has  a  complete 
and  absolute  title  to  the  encircling  wall,  may  laugh  at 
him  who  claims  to  own  the  inclosed  ground.  So  the 
man  who  claims  ownership  of  wine  has  but  an  empty 
title  if  the  wine  be  contained  in  casks  that  are  owned, 
completely  possessed,  and  controlled  by  another.  He 
cannot  enjoy  the  wine  if  the  morgan  owning  the  cask 
says  nay.  Of  what  worth  is  the  science  of  chemistry 
or  engineering  to  a  man  who  has  not  the  means  of  ap- 
plying it?  It  is  worth  no  more  to  him  than  the  morgan 
owning  the  means  will  allow.  So  it  is  that  the  training 
that  the  gentile  receves  is  of  very  little  benefit  to  him 
save  as,  and  in  the  measure  that  he  can  make  use  of 
it  in  serving  the  morgan,  and  the  latter  makes  him  a 
scant  allowance  for  on  account  of  his  extra  skill.    Hence 


the  morgan's  reach  47 

the  style  and  kind  of  regular  education  that  the  gentile 
gets  is-  only  the  style  and  kind  that  the  interests  of  the 
morgan  dictate. 

The  gentiles  of  the  second  and  third  orders  are  very 
little  better  off  in  comparison  to  what  they  might  well 
be,  than  their  brothers  of  the  first  order  are.  If  they 
own  any  shares  of  stock  in  steamships,  railroads,  mines, 
mills,  department  stores,  or  banks  it  amounts  to  a  very 
small  and  uninfluential  interest.  Their  holdings  are 
mostly  in  small  farms  or  homes,  burdened  with  mort- 
gages, small  shops,  catch-as-catch-can  enterprises  and 
occupations.  Whatever  they  have  represents  the  pre- 
carious condition  of  the  gentiles  of  the  second  and  third 
order.  With  them  it  is  a  constant  nipping  and  pinching 
in  the  struggle  to  keep  out  of  the  ranks  of  the  gentile 
of  the  first  order.  When  they  think  that  they  are  well 
off  they  deceive  themselves  by  comparing  favorably 
their  condition  with  the  worse  condition  of  the  gentile 
of  the  first  order,  instead  of  comparing  their  condition 
with  what  it  ought  to  be,  or  with  the  condition  of  the 
morgan. 

It  is  not  necessary  to  segregate  the  gentiles  of  the 
second  order  from  those  of  the  third  order  in  consider- 
ing the  effect  on  society  at  large  of  the  small  share  of 
wealth  that  they  own. 

The  grievous  and  ludicrous  error  constantly  made  by 
gentiles  of  the  second  order  is  that  they  regard  them- 
selves as  capitalists  and  imagine  themselves  in  the  same 
relative  situation  as  the  morgan.  They  think  them- 
selves interested  on  the  same  side  as  the  morgan  be- 
cause they  are  not  yet  pressed  down  as  much  as  the 
gentile  of  the  first  order,  the  wage  worker  is.  In  the 
resulting  unnatural  condition  of  society,  all  of  the 
gentiles  are  made  to  compete  with  each  other  for  the 
necessaries  of  life,  despite  the  natural  solidarity  of  their 


48  WHY  THE  CAPITALIST? 

interests.  The  struggle  of  the  gentiles  of  the  second 
order  against  the  morgan,  are  about  as  ineffectual  as  a 
pop-gun  would  be  against  steel  armor. 

The  gentiles  of  the  second  order  are  driven  back  to 
prey  upon  the  gentiles  of  the  first  order  and  are  made 
to  endure  the  brunt  of  the  resulting  industrial  wars. 
They  think  that  they  are  fighting  for  their  own  interests, 
but  they  are  not.  They  are  only  fighting  for  the  benefit 
of  the  morgan,  and  retain  very  little  of  the  spoils  for  them- 
selves. 

The  gentiles  of  the  third  order,  the  intellectual  and 
physical  mercenaries  of  the  morgan,  present  a  most 
ludicrous  spectacle  with  their  show  of  brass  buttons  and 
brag  of  superior  learning,  as  they  steadily  sink  into  the 
mental  swamps  of  their  own  misguided  choosing.  Mean- 
while they  are  frantically  screaming  their  tiresome  pro- 
test against  the  draining  away  of  the  stagnant  waters 
of  their  fake  dogmas,  fake  laws  and  fake  learning. 

The  morgans  have  one  primal  interest  in  common. 
That  interest  is  to  keep  the  gentile  in  subjection.  In 
all  things  else,  their  individual  economic  interests  are 
in  a  constant,  evergrowing  implacable  hostility  to  each 
other.  The  morgan  is  an  incorrigible.  He  must  subdue, 
he  must  devour.  A  life  of  peace  and  co-operative  par- 
ticipation means  death  to  him.  Therefore  his  whole 
power  is  devoted  to  crushing  out  the  thought  of  it.  He 
has  his  preachers  to  preach  competition  whilst  he  uses 
competition  to  destroy,  break  down  and  oppress.  There 
is  and  can  be  but  one  object  of  his  being.  That  object 
is  sole,  individual  rule  and  personal  domination.  There 
is  a  constant  strife  and  contention  among  the  morgans 
over  the  plunder  taken  from  the  gentiles.  Each  wants 
the  whole  of  it.  These  conflicting  interests  in  the  di- 
vision cannot  be  and  never  will  be  reconciled.  Their 
adjustments  are  but  temporary  truces.     There  can  be  no 


THE  morgan's  reach  49 

peace  among  them  until  the  last  morgan  has  devoured 
all  the  other  morgans,  or  until  the  gentiles  have  driven 
the  whole  brood  of  morgans  from  power. 


CHAPTER  IV. 
CAPITAL. 

The  consensus  of  the  conventional  definitions  of 
"capital"  may  be  summed  up  in  these  words:  "That 
part  of  the  produce  of  industry  which  is  applied  to  further 
production." 

From  the  foregoing,  it  is  apparent  that  "capital"  is 
a  term  applied  to  things  of  value.  We  shall  see  that 
value  is  that  which  is  produced  by  the  work  of  a  human 
being  expended  upon  something  to  make  it  more  ap- 
plicable to  satisfy  human  want.  Separated  from  all 
idea  of  mediately  or  immediately  satisfying  human 
want,  nothing  has  value.  When  our  own  wants  are 
satisfied  and  we  still  have  an  abundance  left  over,  it  at 
once  loses  its  value  unless  there  are  others  with  wants 
capable  of  being  satisfied  by  use  of  it.  A  morgan  then 
by  reason  of  his  ownership  of  this  abundance  can  dic- 
tate the  terms  upon  which  the  others  may  satisfy  their 
wants.  He  may  require  of  them  to  climb  greasy  poles, 
dive  for  pennies  into  bowls  of  molasses,  catch  the  slip- 
pery pig,  walk  backwards  before  him  low  bowing.  He 
may  require  them  to  part  his  hair,  wash  his  face  or  hold 
the  kerchief  as  he  blows  his  nose.  He  may  require  of 
them  to  fetch  his  smelling  salts  or  fetch  his  cigar.  He 
may  require  of  them  to  carry  his  hat  or  his  cane.  He 
may  require  of  them  to  operate  his  motor  car.  He  may 
require  of  them  to  man  and  navigate  his  yacht.  In  re- 
lation to  none  of  these  things  is  the  value  bestowed 
by  the  morgan  called  "capital."  You  may  analyze  every 
instance  of  this  personal  service  and  thousands  more 
that   might   suggest   themselves,   and   you   will   find   that 

eo 


CAPITAL  51 

they  are  all  "go  and  come",  "fetch  and  carry,"  and  all 
of  them  are  in  obedience  and  recognition  of  the  mor- 
gan's power  to  command  the  action  and  movement  of 
others  by  reason  of  his  power  to  shut  of!  or  withhold 
from  them  the  things  necessary  to  supply  their  wants. 
Without  this  power,  all  of  his  store  of  surplus  value 
would  be  valueless,  his  wealth  would  be  dross.  The 
power  of  being  boss,  of  ordering  others  around,  is  the 
quintessence  of  his  wealth. 

The  gentiles  of  the  first  order  produce  large  quantities 
of  value  and  receive  a  small  allowance  of  it.  The  mor- 
gan takes  the  surplus.  He  consumes  all  that  he  can 
consume  of  the  surplus  in  riotous  and  sumptous  living 
and  in  the  maintenence  of  a  numerous  train  of  personal 
attendants.  The  morgan  avails  himself  of  his  owner- 
ship of  the  remainder  in  directing  the  movements  and 
commanding  the  attention  of  other  workers  to  obtain 
for  him  control  of  more  of  the  free  goods  of  nature  and 
more  of  the  means  of  production  with  the  purpose  of 
having  yet  more  value  produced  and  in  such  quantities 
as  to  let  him  take  still  more  surplus  value  by  the  same 
process  ad  infinitum. 

That  which  is  allowed  the  worker  is  called  "wages", 
or  "compensation."  The  name  is  a  misnomer  because 
the  morgan  does  not  pay  or  give  anything  to  the  worker; 
but  on  the  contrary  takes  from  him.  That  portion  paid 
to  personal  attendants,  supernumeraries  and  flunkies 
who   produce  no   value   at   all   is   also  called    "wages." 

The  portion  of  surplus  value  in  the  morgan's  hands, 
the  ownership  of  which  he  avails  himself  of  to  control 
the  production  of  more  value  and  to  get  yet  more  sur- 
plus value,  is  called  "capital". 

Whenever  we  give  another  common  name  to  anything 
to  distinguish  it  from  other  things  that  look  like  it,  we 
usually  do  so  because  something  has  occurred  to  change 


52  WHY  THE  CAPITALIST? 

its  nature  and  make  it  different  from  the  other  things. 
There  is  no  valid  reason  for  giving  the  name  "capital" 
or  any  other  distinguishing  name  to  value  applied  to 
further  production.  In  the  giving  of  the  name  "capital" 
to  this  value  lurks  a  most  subtle  and  far-reaching  false- 
hood. It  implies  a  change  in  the  inherent  nature  of 
value  which  in  truth  never  takes  place.  The  falsehood 
is  rendered  the  more  deceiving  because  suggested,  and 
not  stated  plainly.  It  implies  a  difference  in  the  prin- 
ciple of  its  use  which  does  not  take  place.  To  be  speci- 
fic: "Capital"  does  not  pay  the  worker  engaged  in  the 
further  production  of  value ;  first,  because  the  worker 
is  not  paid  in  advance ;  second,  because  the  worker  is  not 
paid  by  the  capitalist,  but,  quite  to  the  contrary,  makes 
his  pay  by  producing  in  advance  more  value  than  he 
gets.  The  capitalist  takes  the  value  before  he  pays  the 
worker. 

The  purchase  of  tools  and  raw  material  is  merely  the 
acquiring  of  some  value  to  have  more  value  added  by 
labor.  As  these  tools  and  this  raw  material  were  pro- 
duced by  the  application  of  labor  to  the  goods  in  the 
store  house  of  nature,  the  purchasing  of  them  consists 
only  of  commanding  others  to  come  and  go,  carry  and 
fetch. 

What  difference  is  there  in  exercising  power  to  com- 
mand between  "fetch  my  smelling  salts"  and  "fetch  a 
ton  of  coal";  or  between  "build  me  a  mill"  and  "make 
an  omelette  for  me":  or  between  "carry  my  cane"  and 
"carry  that  bale  of  goods";  or  between  "start  up  my 
yacht"  and  "start  up  that  mill"?  True,  their  ultimate 
or  remoter  purposes  may  be  and  are  different.  But  the. 
exercise  of  the  power,  and  the  approximate  purpose  is 
the  same.  It  is  commanding  others,  making  them  jump, 
making  them  come  and  go,  fetch  and  carry,  bring  things 
together  and  separate  other  things.     In  the  one  case  it 


CAPITAL  53 

is  done  by  the  morgan  for  an  immediate  gratification, 
for  the  mere  pleasure  of  seeing  men  jump  and  run ;  and 
in  the  other  case  both  for  this  present  gratification  and 
pleasure  and  for  the  further  gratification  of  raking  in 
more  surplus  value,  for  which  he  has  no  more  use  than 
to  make  still  other  and  more  men  jump  and  run  and 
cry  for  bread.  The  far  greater  reason  that  moves  the 
opulent  morgan  to  have  work  go  on  is  the  pleasure  it 
gives  him  to  dominate  others. 

The  only  purpose  served  by  the  use  of  the  term 
"capital"  is  to  make  it  seem  that  a  distinction  exists 
where  there  is  none  in  fact.  It  serves  to  support  a  fiction. 
This  fiction  is  that  the  accumulated  surplus  value  in 
the  hands  of  the  morgan  produced  by  the  worker  and 
for  which  the  worker  was  not  paid  anything  has  by  some 
necromancy  been  turned  into  a  fairy  that  produces  more 
surplus  value  throughout  the  year  for  the  morgan ;  that 
the  worker  has  not  produced  the  surplus  and  therefore  "in 
justice  and  good  conscience"  is  not  entitled  to  it  or  to  any 
portion  of  it. 

This  trick  of  attaching  a  label  to  a  thing  is  not  unique. 
The  claim  of  an  entirely  new  quality  or  attribute  for 
a  thing  solely  because  of  the  new  name  is  a  frequent 
occurrence.  It  is  most  efficacious  in  misleading.  It 
renders  things  dark  and  muddy  that  otherwise  would 
be  clear.  The  ruse  has  been  successful  only  because  it 
was  not  thought  of  any  consequence  when  it  was  begun. 
It  was  not  of  much  consequence  then,  it  is  true.  People 
got  used  to  it  before  it  became  of  consequence  and  were 
then  loth  to  question  that  which  time  had  established. 
The  resulting  inconvenience  and  confusion  of  thought 
in  the  efforts  to  reason  out  the  problems  that  grew  up 
around  the  subject  was  charged  either  to  other  things 
or  to  the  supposed  inherent  abstruseness  of  the  problems 
themselves. 


34  WHY  THE  CAPITALIST? 

Now  if  a  horse  be  used  to  draw  coal  for  consumption 
under  the  boiler  of  a  private  yacht  or  of  a  freight  boat, 
it  is  still  a  horse.  The  coal  consumed  on  the  freighter 
is  "capital",  that  consumed  on  the  yacht  is  not.  A 
locomotive  engine  is  not  called  by  any  different  name 
when  it  is  running  east  from  the  name  it  has  when  run- 
ning west.  Oats  fed  to  a  saddle  horse  used  for  pleasure 
are  not  called  "capital"  though  they  may  be  out  of  the 
same  bag  as  oats  fed  to  a  working  horse.  Yet  the  oats 
that  the  draught  horse  eats  is  called  "capital." 

If  the  wage-slave  were  a  chattel-slave  producing  value 
for  his  master,  and  receiving  his  daily  rations  from  his 
master,  then  those  rations  would  come  under  the  classi- 
fication of  "capital."  As  wage  slave  he  receives  his 
tations  just  the  same,  though  it  may  be  in  different  form 
or  a  little  different  measure.  Yet  the  food  of  the  wage- 
slave  is  not  called  "capital." 

If  A  hires  B  for  so  much  a  month  or  year  with  board, 
then  every  morsel  B  eats  during  the  term  is  "capital" 
when  viewed  from  the  point  of  view  of  A,  because  it  is 
value  used  in  the  production  of  more  value.  Not  so  from 
B's  point  of  view. 

"Capital",  as  the  conventional  economists  use  the 
term,  stands  for  confusion  of  thought  and  muddy  reason- 
ing. 


CHAPTER  V. 
WHAT  IS  CAPITAL? 
The  Elements  of  Value. 

The  argument  for  the  wage  system  of  productive  in- 
dustry may  be  fairly  stated  to  be:  (1)  That  there  can 
be  no  considerable  production  of  value  without  capital, 
any  more  than  there  could  be  any  production  of  value 
without  labor.  (2)  That  capital  participates  in  the  pro- 
duction of  value,  therefore  is  entitled  to  compensation 
by  way  of  return  upon  the  investment,  just  as  the  laborer 
is  entitled  to  compensation  in  the  form  of  wages  for  his 
services  in  the  process  of  production. 

We  must  here  get  a  clear  understanding  of  our  princi- 
pal terms  so  as  to  avoid  confusion  of  thought.  Capital 
has  been  defined  by  all  the  conventional  economists  as 
meaning  that  value  which  is  used  in  the  production  of 
more  value.  But  here  they  stop.  They  give  us  three 
vaguely  understood  words  that  yet  are  of  the  highest 
importance.  These  should  also  be  most  clearly  defined. 
The  words  are  "value",  "used"  and  "prcwjction".  We 
can  make  no  progress  otherwise.  The  greatest  of  fal- 
lacies flow  from  the  false  assumptions  that  lie  in  the  use 
of  these  three  simple  words  by  the  conventional  economists. 
This  chapter  will  be  devoted  to  an  examination  of  the  sub- 
ject of  value. 

The  conventional  economists  tell  us  that  here  is  a 
"use  value"  and  an  "exchange  value."  All  that  they 
tell  us  in  this  regard  is  that  considerations  of  value  some- 
times arise  in  connection  with  the  utility  of  goods,  and 
sometimes  in  connection   with  the  exchange  of  goods- 

55 


£6  WHY  THE  CAPITALIST? 

We  learn  nothing  of  the  nature  of  value  from  such  teach- 
ing. 

We  are  also  told  that  some  value  is  "value  from  pro- 
duction" and  that  some  value  is  "value  from  obligation". 
Such  sage  utterances  can  relate  only  to  the  method  of 
the  acquisition  of  value  by  the  individual,  namely,  that 
some  get  value  by  producing  it  and  others  have  value 
given  to  them  in  discharge  of  obligations.  We  are  not 
enlightened  much  on  the  nature  of  goods  by  being  told 
that  some  of  them  come  by  slow  freight  and  some  of 
them  by  fast  mail. 

Other  conventional  instructors  tell  us  of  values  that 
arise  out  of  "marginal  utilities."  Their  theory  is  that  value 
and  the  extent  of  value  is  dependent  entirely  on  how 
badly  human  beings  want  the  things  that  contain  certain 
satisfaction-giving  qualities.  Nor  is  there  any  light 
afforded  us  by  this  information  to  assist  us  in  the  in- 
quiry as  to  what  constitutes  value? 

The  class  of  writers  that  have  given  us  the  sort  of 
information  referred  to  could  just  as  well  have  told  us 
that  there  are  strayed  cats,  lost  cats  and  stolen  cats,  and 
then  call  their  work  an  analysis  of  the  nature  of  cats. 

There  were  however  two  writers  who  in  the  course  of 
their  work  did  approach  a  discussion  of  the  nature  of 
value.  These  were  Karl  Marx  and  John  Stuart  Mill. 
Marx  in  his  great  work  "Capital",  says: 

"It  thus  becomes  evident  that  since  the  existence  of  commod- 
ities as  values  is  purely  social,  this  social  existence  can  be  expressed 
by  the  totality  of  their  social  relations  alone,  and  consequently  that 
the  form  of  their  value  must  be  a  socially  recognized  form." 

Karl  Marx  was  a  profound  student  of  the  writers  on 
political  economy  that  preceded  him  and  did  not  escape 
being  to  some  extent  drawn  into  their  method  of  reason- 
ing,  although   he   was   most  unrelenting  in   his   warfare 


CAPITAL — THE  ELEMENT  OF  VALUE  57 

upon  them,  and  time  has  proved  the  eminent  success 
with  which  he  labored. 

Marx  struck  the  right  cue  when  he  said  that  the  nature 
of  value  is  purely  social.  Had  he  followed  that  cue  to 
its  logical  conclusion  he  would  have  spared  himself  a 
great  amount  of  work  and  would  at  the  same  time  have 
spared  his  readers  much  of  the  unnecessary  brain-weary- 
ing effort  involved  in  reading  "Capital".  Marx  labored 
under  the  disadvantages  that  usually  burden  the  pioneer. 
Much  of  his  effort  was  consumed  in  the  clearing  away 
of  underbrush. 

John  Stuart  Mill  said:  "Value  is  a  relative  term." 
Herein  and  to  that  extent  we  can  agree  with  him.  But 
then  we  have  the  all-important  question:  "Relative  to 
What"?  Mill  says  that  value  is  relative  to  things  only. 
Here  is  where  I  disagree  with  him.  Value  is  relative 
to  human  beings  living  in  society,  and  has  to  do  only 
with  social  relations.  Mill  says  "the  value  of  a  thing 
means  the  quantity  of  some  other  thing,  or  things  in 
general  which  it  exchanges  for."  The  trouble  with  this 
statement  is  that  a  thing  does  not  exchange  itself  for 
another  thing.  All  of  the  exchanging  is  done  by  man. 
It  is  the  difference  between  a  transitive  and  an  in- 
transitive verb.  The  man  who  desires  to  exchange  a 
thing  for  some  other  thing  must  find  the  man  who  owns 
the  other  thing  and  agree  with  him  on  terms.  Their 
minds  must  meet  and  agree  on  an  estimate  of  the  amount 
of  the  respective  values  to  the  extent  of  effecting  the 
trade.  Under  the  present  conditions  value  is  entirely  a 
matter  of  individual  opinion  and  all  statements  of  its 
extent  or  measure  are  wholly  and  vaguely  speculative 
in  their  very  nature,  and  can  n  ever  be  otherwise  until 
the  system  under  which  we  live  is  changed.  Evaluation 
is  at  present  nothing  but  guess  work. 

The   conventional   economists   do   not   intimate   whether 


58  WHY  THE  CAPITALIST? 

value  is  a  substance  or  a  quality,  whether  it  is  concrete  or 
abstract,  whether  it  can  be  measured  by  the  yard  or  by  the 
gallon,  or  by  the  hour,  or  whether  it  can  be  weighed. 

The  statement  of  Mill,  and  that  is  as  good  as  any 
coming  from  the  conventional  economists,  means  that 
the  thing  xa  exchanges  for  the  thing  xb  because  the 
thing  xa  contains  as  much  value  as  the  thing  xb  con- 
tains. That  of  course  means  also  that  the  thing  xb 
exchanges  for  the  thing  xa  because  the  thing  xb  con- 
tains as  much  value  as  the  thing  xa  contains.  This 
beautiful  piece  of  reasoning  brings  us  right  back  to  the 
point  that  we  started  from.  It  leaves  us  as  wise  as  we 
were  before. 

The  lucubrations  of  Mr.  Mill  and  all  of  his  school 
deal  with  value  as  if  it  were  a  thing  unlike  anything  else 
in  the  heavens  above  or  on  the  earth  beneath  or  in  the 
waters  under  the  earth.  All  other  comparable  properties 
or  attributes  expressed  in  quantity,  or  compared  for 
any  purpose,  have  the  benefit  of  definitely  statable  meas- 
urements. We  can  measure  distance,  we  can  measure 
time,  we  can  measure  bulk,  we  can  measure  heat,  we  can 
measure  light,  we  can  measure  movement,  we  can  meas- 
ure velocity,  we  can  measure  energy,  electric,  steam, 
gaseous,  hydraulic  and  atmospheric.  We  can  measure 
all  of  these  things  accurately  and  to  a  nicety.  The  con- 
ventional economists  pretend  very  learnedly  to  treat  of  a 
science  of  values,  and  yet  they  leave  us  in  the  dark  as 
to  what  value  really  is.  They  leave  value  a  vague,  un- 
definable  thing  that  cannot  be  weighed  or  measured. 

The  reason  for  this  is  very  plain.  A  statement  of  the 
one  essential  of  value,  would  show  that  their  whole  sys- 
tem of  political  economy  is  without  support  and  cause 
it  to  fall  together  like  a  house  of  cards. 

The  term  value,  because  of  popular  usage,  has  shades 
of  meaning  with  which  I  am  not  concerned  in  this  work, 


CAPITAL — THE  ELEMENT  OF  VALUE  59 

I  am  interested  only  in  its  connection  with  and  bearing 
upon  public  or  political  economy. 

There  can  hardly  be  a  public  where  there  is  only  one 
lone  man.  Therefore  there  cannot  be  any  consideration 
of  public  or  political  economy  in  such  a  world.  If  that 
one  man  catches  a  fish  or  kills  a  deer,  and  not  being 
able  to  devour  the  whole  of  it  at  one  sitting,  he  hides 
the  remainder  so  that  he  can  come  back  to  it  again  from 
time  to  time  to  have  another  bite,  he  has  left  part  of 
his  labor  stored  in  the  uneaten  provisions.  Here  we 
have  two  of  the  elements  of  value,  namely,  something 
useful  and  stored  up  labor  power.  But  the  third  ele- 
ment necessary  to  constitute  value  is  entirely  wanting. 
There  is  an  entire  absence  of  human  society.  In  a 
politico-economic  sense  there  is  not  and  cannot  be  any 
consideration  of  value  there  until  another  man  comes 
along  who  might  want  some  of  the  fish  or  venison. 
Then  we  shall  immediately  have  human  society,  and 
that  is  what  we  are  dealing  with. 

It  were  bootless  to  argue  as  to  whether  or  not  any 
value  can  be  in  the  thing  in  itself  when  only  one  man 
is  interested.  He  does  not  trade  things  with  himself 
for  other  things.  As  well  argue  as  to  whether  or  not 
that  value  in  the  thing  in  itself  could  still  be  and  con- 
tinue in  the  absence  of  any  human  being.  For  instance 
if  the  lone  savage  swallowed  a  fish  bone,  or  took  sick 
from  ptomaine  poisoning,  and  died  before  he  had  eaten 
all  his  store,  where  would  the  value  in  itself  be  then? 
What  becomes  of  it?  One  might  with  no  less  point 
or  relevancy  in  our  field  of  inquiry,  just  as  well  stop 
and  argue  over  the  question  as  to  whether  or  not  a  lone 
living  being  who  had  never  met  or  had  commerce  with 
another  human  being,  would  be  or  could  be  possessed 
of  conventional  language  so  as  to  talk  to  himself  as  well 
as   trade   with   himself,   whether   he   could  ever   develop 


GO  WHY  THE  CAPITALIST? 

the  idea  of  communicating  or  trading  without  ever  hav- 
ing anyone  to  communicate  or  trade  with,  or  could  have 
any  other  idea  before  he  had  any  experience.  Or  one 
might  as  well  discuss  whether  or  not  it  is  possible  to 
receive  a  concept  of  distance  or  time  in  an  absolutely 
vacant  cosmos.  These  are  purely  academic  questions  so  far 
as  the  matters  in  this  work  are  concerned.  I  am  considering 
here  the  matter  of  human  society,  man's  relationship  to  man. 

Take  for  instance  the  shave  that  a  barber  gives  a 
customer.  Here  we  have  the  three  elements  that  make 
up  value  in  the  service  performed  by  one  man  for  an- 
other, producing  for  him  the  comfort  of  a  clean  face. 
Here  are  usefulness,  human  effort  and  human  society. 
When  we  come  to  consider  production  we  shall  see  that 
shaving  a  face  is  no  different  in  the  principle  of  labor 
than  sawing  off  a  board  or  the  making  of  a  coat.  As 
the  barber  gives  the  shave  to  the  customer  it  has  value- 
for  there  is  the  social  relation.  But  the  customer  can- 
not give  that  same  shave  to  another.  It  cannot  be  made 
to  enter  into  social  relationship,  any  further.  It  can  no 
longer  be  regarded  as  having  value.  If  the  man  shaves 
himself  there  is  no  social  relationship  in  the  transaction 
and  to  say  that  that  shave  has  value  in  the  politico- 
economic  sense  is  to  indulge  in  a  meaningless  phrase. 
One  could  say  the  same  for  the  act  of  the  man  blowing 
his  own  nose  or  washing  his  own  hands  or  for  anyone  of 
many  other  similar  acts. 

Value  is  entirely  relative.  It  relates  however  to 
human  society.  In  the  absence  of  human  beings  there 
could  not  be  any  value  whatever.  None  of  the  other 
measureable  qualities  and  attributes  depend  upon  the 
presence  or  the  existence  of  man.  Distance,  bulk, 
weight,  time,  etc.,  may  very  well  exist  on  a  dead  and 
uninhabited  planet.  But  there  could  not  be  any  value 
there  whatever. 


CAPITAL — THE  ELEMENT  OF  VALUE  61 

Value  is  therefore  social.  It  can  only  exist  in  human 
society.  If  only  one  human  being  lived  upon  this  planet, 
there  could  be  no  value.  This  lone  man  would  not  be 
able  to  exchange  anything  with  any  other  human  being 
for  any  other  thing.  There  must  be  a  human  society  in 
which  one  man  may  exchange  the  ownership  of  one 
thing  for  the  ownership  of  another  thing.  It  is  only 
another  way  to  state  the  proposition  to  say  that  a  thing 
must  be  brought  into  human  society  before  it  can  have 
any  value  whatever. 

A  million  tons  of  the  very  finest  of  anthracite  coal 
at  the  bottom  of  an  ocean  a  thousand  fathoms  deep 
would  have  absolutely  no  value  until  some  one  brought 
it  to  the  place  where  human  society  existed  so  that  one 
man  could  exchange  it  for  other  things  that  other  men 
had  and  would  exchange  for  the  coal.  Then  and  then 
only  could  it  have  value.  The  entire  value  in  this  coal 
would  come  into  existence  because  of  the  expenditure  of 
human  effort.  Labor,  therefore,  constitutes  all  the  value 
that  there  is  in  the  coal. 

Nor  does  the  usefulness  of  any  article  or  substance, 
or  the  necessity  of  having  it  impart  value  to  it.  We 
could  not  live  without  water,  yet  water  in  itself  has 
no  value.  In  front  of  me  lies  Lake  Erie,  an  immense 
body  of  fresh  wholesome  water  as  provided  by  nature 
in  sufficient  volume  for  all.  If  I  transplant  myself  to 
its  shore  I  will  there  have  all  the  water  I  want,  free 
for  just  the  drinking  of  it  and  bathing  in  it.  Yet  there 
the  water  has  no  value.  But  here  I  am  in  my  office 
overlooking  the  lake  a  mile  or  more  away.  If  under 
primitive  conditions  some  one  should  bring  a  pail  of  that 
water  from  the  lake  to  me  for  my  use  and  comfort,  that 
same  water  in  his  pail  would  contain  a  value  and  I 
would  be  under  obligation  to  give  an  equivalent  of  that 
value,  contained  in  something  else  in  return  for  it.    I  go 


62  WHY  THE  CAPITALIST  ? 

to  the  tap  at  the  basin  in  my  room  and  turn  on  the  water. 
Here  also  this  water  has  value.  The  element  of  value 
is  the  conscious  human  effort  that  was  expended  to  bring 
the  water  to  the  place  where  it  could  be  of  service  to 
another. 

Take  the  air  we  breathe.  Here  we  have  every  one 
of  the  elements  that  make  it  a  necessary  of  life.  Yet  it 
lacks  value.  No  possible  effort  of  any  person  is  required 
to  make  air  available  for  another  person  to  breathe. 
Therefore  it  is  not  a  subject  of  exchange,  does  not  effect 
the  relationship  of  one  man  to  another,  or  in  the  slight- 
est degree  effect  the  social  relations.  Should  anyone 
still  assert  that  air  has  value,  ask  him  what  is  the  meas- 
ure of  that  value,  how  he  will  measure  it.  Whilst  there 
may  be  unmeasured  value,  there  cannot  be  immeasure- 
able  value  any  more  than  there  can  be  imponderable 
weight.  What  is  the  amount?  There  can  be  no  value 
unless  you  can  find  its  equivalent  any  more  than  there 
can  be  a  conception  of  a  yard  without  a  standard  of 
measurement.  Who  is  the  owner,  who  the  buyer,  who 
the  seller?  If  anyone  answer  that  the  air  we  breathe 
is  worth  life,  I  shall  answer  that  he  is  indulging  in 
senseless  phrases.  To  whom  would  the  life  be  payable? 
The  moment  you  paid  the  life  it  would  end,  it  would  be 
valueless,  death  ensues. 

If  some  morgan  could  devise  a  scheme  to  shut  off  the 
air,  and  charge  a  price  for  each  cubic  foot  of  it  we 
breathe,  he  could  doubtless  drive  a  lucrative  business. 
He  would  doubtless  even  flatter  himself  into  believing 
that  he  was  rendering  a  most  valuable  service  by  supply- 
ing us  with  air !  But  it  will  readily  be  seen  that  he  is 
not  adding  the  element  to  give  value.  His  efforts  would 
all  have  been  the  other  way.  His  efforts  were  not  to 
make  an  application  of  this  air  to  our  wrant.  It  was  to 
keep  us   from   having  that  which  nature  gave  us,   save 


CAPITAL — THE  ELEMENT  OF  VALUE  63 

as  we  gave  up  to  him  in  such  measure  as  he  dictated. 
He  would  enslave  me,  make  me  pay  tribute  to  him, 
make  us  buy  of  him  that  which  was  already  ours  and 
which  he  had  stolen  from  us. 

Now  it  is  possible  to  add  even  to  air  the  element  that 
would  give  it  true  and  measurable  value.  A  man  might 
compress  air  into  tubes,  or  he  might  extract  and  confine 
in  packages  the  essential  parts  of  air  necessary  to  sus- 
tain animal  life,  so  that  it  might  be  taken  on  a  submarine 
boat  trip  where  it  would  be  available  to  sustain  life.  It 
might  be  used  in  high  altitudes  for  the  same  purpose; 
or  it  might  be  used  for  medicinal  purposes.  Or  it  might 
be  used  in  tunnel  building,  or  it  might  be  used  to  drive 
drills  or  other  machinery.  Here  again  we  should  have 
value  created  by  labor  in  compressing  the  air,  or  in  ex- 
tracting the  oxygen. 

So  too,  value  may  be  put  into  the  sun's  heat  by  labor 
in  the  building  of  solar  engines  to  generate  power,  with- 
out the  consumption  of  fuel.  The  sun's  rays  there  are 
utilized  directly  and  made  a  vehicle  of  value.  All  of  this 
value  is  the  result  of  human  labor. 

The  very  pull  of  the  earth,  gravitation,  devoid  of  value 
in  itself,  has  value  imparted  to  it  by  labor,  and  labor 
alone.  Without  labor  there  could  be  no  power  generat- 
ing equipment  at  any  of  the  water  falls  to  utilize  the 
pull  of  the  earth  through  the  medium  of  falling  water 
to  run  mills,  operate  distant  electric  motors  and  furnish 
light.  Labor  expended  for  a  useful  purpose  in  human 
society  is  all  that  there  is  of  value  in  these  things.  All 
of  the  rest  are  free  goods  of  nature. 

The  other  illustrations  that  might  be  added  are  legion. 

Yesterday  I  was  out  on  the  lake  alone  in  a  boat  for 
pleasure  and  recreation.  I  was  anchored  over  a  rocky 
reef  at  least  five  miles  away  from  any  other  person.  The 
black  bass  were  disporting  in  the  clear  water  below  me. 


G4  WHY  THE  CAPITALIST? 

These  fish  had  no  value  where  they  were.  I  caught  one, 
cooked  it  and  enjoyed  a  feast.  Still  there  was  no  value 
produced.  The  fish  did  not  enter  into  consideration  be- 
tween me  and  anyone  else.  There  was  no  social  re- 
lation, therefore  there  could  not  be  any  value.  Wherein 
did  my  taking  the  fish  from  the  lake  and  eating  it  differ 
in  principle  from  my  dipping  water  from  the  lake  and 
drinking  it,  or  filling  my  lungs  with;  the  bracing  air? 
It  is  true  the  fish  gave  me  sustenance.  So  did  the  water, 
so  did  the  air.  It  is  true  that  if  any  one  had  come  upon 
me  and  demanded  the  fish  I  could  rightfully  have  re- 
fused to  give  it  to  him.  But  if  he  had  demanded  the 
water  that  I  had  just  dipped  up  to  drink,  or  if  he  had 
demanded  that  particular  portion  of  air  that  I  was  just 
then  enhaling  I  could  with  equal  right  have  refused  to 
give  it.  up.  Here  a  social  relationship  arises.  There  and 
then  we  should  have  the  additional  element  introduced 
to  present  to  us  the  subject  of  value.  The  demand  made 
upon  me  by  my  new  companion  for  my  service  is  a  de- 
mand for  value.  Upon  my  complying  with  his  demand, 
the  cup  of  water  and  the  fish  became  the  medium  by 
which  my  companion  receives  service  from  me.  Here 
we  have  a  transference  of,  a  handing  over  of  the  only 
thing  that  can  properly  be  called  value,  namely,  labor 
service  in  relationship  to  human  society.  Neither  the 
cup  of  water  nor  the  fish  in  itself  can  properly  be  called 
value  any  more  than  an  electric  wire  can  itself  be  called 
the  electric  current  that  it  conveys. 

The  life  sustaining  or  serving  properties  of  things  do 
not  in  themselves  constitute  or  impart  value.  The  air 
I  breathe,  the  light  from  the  sun,  the  heat  from  the  sun, 
the  attractive  power  of  the  earth  that  enables  me  to  be 
upon  it  and  move  about,  the  attractive  power  of  the 
sun,  planets  and  stars  that  hold  the  earth  to  this  solar 
system,  the  orbit  or  track  that  the  earth  moves  in  around 


CAPITAL — THE  ELEMENT  OF  VALUE  65 

the  sun,  nature's  laws  of  chemistry,  mechanics,  etc.,  are 
all  necessary  for  the  maintenance  of  life  in  the  forms 
that  we  see.  Yet  none  of  these  things  can  be  said  in 
itself  to  have  value.  If  the  contrary  be  asserted,  then 
what  is  the  value  of  sun  light,  or  sun  heat?  In  the  very 
nature  of  things,  none  can  be  weighed,  measured  or  esti- 
mated. All  of  those  things  exist  independently  of  man, 
and  are  not  the  subject  of  exchange. 

Labor  service  has  a  beginning  and  an  ending.  It  has 
scope,  quantity  and  gradation.  It  can  be  accurately 
admeasured.  Its  equivalent  is  readily  ascertainable, 
and  it  can  readily  be  exchanged  for  its  equivalent.  That 
equivalent  is  a  like  amount  of  labor  service.  The 
equivalent  of  the  value  in  the  cup  of  water  given  by  me 
to  my  companion  or  in  the  fish,  is  a  cup  of  water  dipped 
up  by  him  at  the  same  place,  or  a  like  fish  there  taken 
by  him  and  handed  to  me;  or  the  expenditure  by  my 
companion  of  a  like  amount  of  effort  in  rendering  me 
some  other  labor  service. 

This  admeasurement  and  exchange  of  value  it  might 
be  said  is  upon  the  basis  of  unskilled  labor.  A  giant  in 
strength,  born  full  grown,  could  not  perform  the  simple 
act  of  dipping  up  a  cup  of  water  until  he  had  acquired 
the  requisite  skill  and  understanding  in  the  use  of  his 
physical  powers  and  the  handling  of  the  cup.  Skill  is 
the  product  of  previous  simple  labor  that  enters  into 
the  performance  of  the  skillful  act. 

If  some  morgan  had  obtained  from  some  prince  or 
potentate,  or  lured  from  some  legislature  or  other 
sovereign  power  a  patent  or  grant  of  this  great  expanse 
of  water  and  posted  armed  guards  along  the  shore,  for- 
bidding me  to  drink  of  the  water  or  take  any  of  the  fish 
except  upon  the  terms  imposed  by  him,  then  we  should 
have  the  interposition  of  an  alleged  property  right  based 
upon  and  having  its  origin  in  the  exercise  of  a  superior 


66  WHY  THE  CAPITALIST? 

force  for  the  gratification  of  this  morgan  to  my  detri- 
ment. Here  I  shall  be  confronted  by  the  exercise  of  a 
war  power  against  me  and  in  favor  of  the  morgan,  tak- 
ing from  me  by  force  that  which  nature  gave  to  me  in 
common  with  others  of  the  past,  the  present  and  the 
future  generations  and  giving  it  to  the  morgan.  This 
morgan  would  then  impose  terms.  If  I  wished  to  take 
water  or  fish  from  the  lake  I  would  be  compelled  to  pay 
him  a  price.  This  price  is  tribute  pure  and  simple.  Not 
a  particle  of  value  has  resulted  from  my  exclusion  at 
the  hands  of  the  morgan  or  at  the  hands  of  the  sovereign 
for  the  benefit  of  the  morgan. 

Or  perhaps  the  morgan  will  decide  that  he  will  dip 
the  water  from  the  lake  for  me  to  drink  or  take  the 
fish  from  the  lake  for  me  to  eat.  The  morgan  would 
then  have  some  right  to  say  that  he  had  given  me  this 
service  of  which  the  water,  or  the  fish,  was  the  vehicle, 
hence  have  given  me  value.  It  will  be  noted  that  I  have 
said  "some  right".  I  have  in  mind  and  will  now  say 
only  in  passing,  as  I  shall  come  back  to  the  subject  in 
its  proper  place,  that  this  right  is  very  much  incumbered. 
In  the  first  place  and  for  the  purpose  of  enhancing  its 
quantity,  the  morgan  adulterates  the  value  by  mixing 
with  it  the  water,  or  the  fish  as  such.  In  the  second 
place,  the  value  that  the  morgan  does  give  me  is  tainted. 
It  is  saturated  with  the  motive  for  gain,  for  profit,  for 
the  purpose  of  getting  more  in  return  than  an  equivalent 
in  value  for  the  value  given  by  him.  It  differs  from  the 
transaction  I  had  out  on  the  lake.  I  dipped  the  water 
from  the  lake  and  handed  it  to  my  friend.  He  drank  it, 
then  dipped  some  water  up  and  handed  it  to  me.  I  took 
a  fish  and  gave  it  to  him.  He  ate  the  fish.  He  there- 
upon took  a  fish  and  gave  it  to  me.  I  ate  the  fish  he 
gave  me.  True,  I  was  actuated  by  selfish  motives.  So 
was  my  friend.     I  desired  the  pleasure  that  comes  from 


CAPITAL — THE  ELEMENT  OF  VALUE  67 

being  pleasing  to  my  associates,  the  pleasure  that  comes 
from  a  spirit  of  abandon,  the  pleasure  that  comes  from 
a  self-confidence,  from  a  casting  out  of  all  fear  for  my 
own  future  bodily  comfort  and  sustenance,  the  pleasure 
of  the  mental  attitude  that  comes  from  the  physical  act 
of  treating  lightly  questions  of  my  own  comfort.  Then 
there  is  the  selfish  desire  of  having  my  friend  to  regard 
me  as  being  noble  minded  and  companionable.  My 
friend  in  returning  the  favors  is  actuated  by  the  same 
motives,  and  finds  pleasure  in  being  equal  in  every  way 
to  the  standards  that  excite  admiration.  This  mental 
attitude  necessarily  excludes  all  idea  of  extolling  the 
value  of  the  services  that  either  of  us  rendered.  The 
very  nature  of  the  situation  renders  it  degrading,  in  our 
minds,  for  either  of  us  to  suggest  in  the  slightest  degree 
that  he  was  giving  anything  of  great  value  to  the  other. 

How  different  the  transaction  of  the  morgan !  This 
creature  hands  the  cup  of  water  or  gives  the  fish,  not 
for  the  purpose  of  any  pleasure  in  the  act  or  to  gain 
friendship,  good  fellowship  or  esteem.  He  is  in  busi- 
ness. His  motive  is  to  get  the  largest  immediate  return 
for  the  least  outlay  of  effort.  There  is  the  motive  to 
give  no  more  service  than  just  enough  to  present  a  show 
of  value.  There  is  the  intermingling  of  the  means  of  ex- 
tracting tribute,  the  taint  of  coercion.  Superadded  to 
all,  and  as  a  corollary,  there  is  the  further  motive  to  tell 
falsehoods,  the  puffing  of  wares,  the  effort  to  show  values 
in  excess  of  what  they  really  are. 

Other  things  are  subject  to  the  same  analysis.  The 
coal  in  the  earth  put  there  by  the  same  nature  that 
placed  the  water  and  fish  in  the  lake  has  no  value  until 
one  human  being  brings  it  to  another  human  being  who 
has  need  of  it.  The  exclusive  possession  of  the  ground 
in  which  it  lies  imbedded  has  its  origin  in  and  depends 
for  its  continuation  upon  the  war  power  of  the  sovereign 


68  WHY  THE  CAPITALIST? 

t!hat  excluded  the  rest  of  mankind  from  it  and  gave 
it  to  the  morgan.  This  exclusion  of  the  rest  of  mankind 
gives  no  value  to  the  coal.  It  only  gives  to  the  morgan 
the  power  to  exact  tribute  from  me  whenever  I  want 
to  get  coal,  in  the  same  manner  that  he  would  exact 
tribute  to  let  me  breathe  the  air,  drink  the  water  or  take 
the  fish. 

The  same  is  true  as  to  the  deer  in  the  forest,  the  fruit 
and  the  roots  that  grow  there  and  the  grain  that  grows 
in  the  wilds.  I  may  take  them  and  eat  them,  yet  there 
is  no  more  value  there,  or  consumed,  than  is  contained 
in  the  open  air  that  I  breathe,  or  the  many  other  neces- 
saries that  I  take  and  that  nature  has  provided  for  all 
living  creatures.  One  is  as  conducive  as  the  other  to 
life.  Yet  value  does  not  enter  until  a  human  being  ex- 
pends effort  to  kill  the  deer,  pick  the  fruit,  cut  the  grain 
or  dig  the  roots,  and  bring  them  to  another  human  be- 
ing for  the  latter's  use.  So  when  the  hunter  kills  the 
deer  and  brings  it  to  me  he  is  creating  value,  first  by 
killing  the  deer,  then  by  cleaning  it,  then  by  transporting 
it,  the  farther  he  transports  it  the  more  value  he  creates. 
I  accept  the  venison  and  pay  him.  In  doing  so  I  am 
not  buying  the  venison  in  itself,  whatever  popular 
speech  may  say.  I  am  in  truth  and  in  fact  buying  the 
value  that  the  hunter  created,  I  am  buying  the  result 
of  his  labor.  The  deer  in  the  forest  was  mine  as  much 
as  it  was  his  and  his  as  much  as  mine.  It  became  a 
means  and  venire  to  hold  and  convey  his  labor  as  the 
pail  was  the  means  of  conveying  the  water  that  took 
in  and  conveyed  the  labor  of  the  man  who  brought  the 
water  to  me.  The  same  is  true  of  the  fruit,  the  grain 
and  the  roots.  To  say  that  I  buy  them  is  only  a  figure 
of  speech.  What  I  buy  is  the  labor  service  of  the  man 
who  gathered  them. 

The  value  in  the  produce  of  the  cultivated  fields  and 


CAPITAL — THE  ELEMENT  OF  VALUE  69 

pastures  is  of  the  same  nature.  It  consists  of  the  labor 
imparted  to  and  into  the  free  goods  of  nature,  rendering 
them  more  serviceable  and  more  available  for  the  pro- 
motion of  human  life,  comfort  and  happiness. 

As  a  result  of  the  foregoing  considerations  I  should 
say: 

Value  is  that  which  results  from  the  applied  effort 
of  a  human  being  producing  a  usefulness  in  whole  or  in 
part  of  which  another  human  being  may  avail  himself. 
Another  good  definition  would  be:  The  transmittible 
good  brought  into  human  society  by  human  effort. 


CHAPTER  VI. 

CAPITAL. 

What  is  Meant  by  the  "Use"  of  Capital  in  Production? 

"Use",  in  the  sense  that  value  is  used  in  the  produc- 
tion of  more  value,  means  to  employ  value  for  the  at- 
tainment of  a  purpose  and  end.  Now  as  all  value  is  the 
result  of  human  labor,  when  one  says  that  value  is  used 
in  the  production  of  more  value,  all  that  possibly  can 
be  meant,  in  reason,  is  that  the  labor  of  the  past  is  added 
to  and  enhanced  by  the  labor  of  the  present,  and  that 
this  orderly  system  of  production  results  in  an  ever  increas- 
ing volume  of  value. 

To  call  some  of  this  value  capital,  and  so  give  it  an- 
other name  serves  one  and  only  one  purpose.  It  be- 
clouds the  mind.  Human  labor  is  expended  upon  the 
free  goods  of  nature,  making  them  mediately  or  immedi- 
ately either  applicable  or  more  applicable  to  the  satisfy- 
ing of  human  wants.  Separated  from  all  idea  of  satisfy- 
ing human  wants,  nothing  has  value.  When  the  wants 
of  the  morgan  are  satisfied  and  he  still  has  an  abund- 
ance of  value  left  over,  that  abundance  would  at  once 
lose  its  value  if  there  were  not  others  with  wants  cap- 
able of  being  satisfied,  and  without  any  other  means 
of  being  satisfied  than  from  this  surplus  that  the  morgan 
still  has  on  hand. 

The  morgan  by  reason  of  his  control  of  the  surplus 
can  dictate  the  terms  upon  which  the  rest  of  humanity 
may  satisfy  their  needs.  He  may  require  them  to  climb 
greasy  poles,  immerse  their  faces  into  basins  of  molasses 
for  pennies,  catch  the  slippery  pig,  walk  backwards  be- 

TO 


CAPITAL — WHAT  IS  MEANT  BY  "USED"?  71 

fore  him,  low  bowing  in  servile  obeisance.  He  may  re- 
quire them  to  part  his  hair,  wash  his  face  or  hold  his 
kerchief.  He  may  require  them  to  fetch  his  salts  or 
his  cigar,  or  to  carry  his  cane.  He  may  require  them  to 
operate  his  motor  car.  He  may  require  them  to  man 
and  navigate  his  private  yacht.  In  none  of  these  things 
is  the  value  applied  by  the  morgan  in  paying  for  this 
entertainment  or  whim-dictated  service  called  capital. 

You  may  analyze  every  instance  of  employment  and 
thousands  more  that  might  suggest  themselves,  and  you 
will  find  that  they  are  all  to  go  and  come,  to  gratify 
whims  and  do  reverence.  All  of  them  are  in  obedience 
and  in  recognition  of  the  morgan's  power  to  command 
the  acts  and  movements  of  others  through  his  property, 
power  to  shut  off  from  them  their  supply  of  the  free 
goods  of  nature,  as  well  as  the  value  imparted  to  those 
free  goods  of  nature  by  human  labor.  To  shut  these 
things  off  is  to  shut  off  the  necessaries  of  life.  Without 
this  power  of  the  morgan,  all  of  his  store  of  surplus 
value  would  be  valueless.  His  wealth  would  be  dross. 
The  power  of  being  boss,  the  power  to  dictate  to  others, 
to  order  them  around,  is  the  quintessence  of  all  that  is 
attractive  in  bis  wealth. 

The  workers  produce  large  quantities  of  value.  After 
they  have  produced  it,  they  receive  out  of  it  that  dole 
necessary  for  them  to  have  so  as  to  live  and  produce 
more.  The  morgan  consumes  all  that  he  can  consume 
of  the  surplus  in  riotous  and  sumptuous  living  and  in 
the  maintenance  of  a  numerous  train  of  personal  at- 
tendants. A  huge  residue  of  value  still  remains.  This 
the  morgan  graciously  permits  the  gentile  still  further 
to  enhance.  All  this  however  is  done,  as  before,  under 
the  terms  and  conditions  imposed  by  the  morgan.  For 
it  is  all  his  property.  All  this,  so  that  he  can  keep 
right  on  in  the  same  process,  extending  ever  his  power 


72  WHY  THE  CAPITALIST? 

to  wider  and  wider  spheres,  so  as  to  be  able  to  drive  and 
harass  an  ever  increasing  number,  without  end  and  with- 
out cessation. 

The  dole  which  is  allowed  the  producer  of  value,  is 
called  wages.  From  the  morgan's  point  of  view  it  is 
capital.  He  regards  it  as  value  used  to  produce  more 
value.  The  same  is  true,  to  him,  of  the  oats  fed  to  the 
draught-horse.  The  dole  which  the  morgan  gives  to  his 
personal  attendants  and  flunkies  who  produce  nothing 
is  also  called  wages.  But  this  is  not  regarded  as  capital, 
for  it  is  not  said  to  be  used  in  the  production  of  more 
value.  Nor  are  the  oats  fed  to  the  polo  pony  regarded 
as  capital. 

There  is  no  basis  in  reason  for  giving  a  different  and 
distinguishing  name  to  value  to  which  more  value  is 
added  in  the  course  of  further  production.  The  nature 
of  that  value  is  not  changed  a  particle  by  increasing 
its  volume.  It  is  ■  still  social  and  relative,  though  its 
function  may  be  changed.  It  were  just  as  reasonable 
to  give  a  distinguishing  name  to  the  sand  itself  in  the 
bottom  or  the  middle  of  an  artificially  produced  sand 
pile,  because  without  there  being  sand  at  the  bottom 
or  in  the  middle  of  the  sand  pile,  there  could  not  be  any 
on  the  top.  It  is  true  that  without  the  bottom  and  the 
middle  there  could  not  be  a  top  to  the  sand  pile,  but 
it  was  labor  that  placed  the  sand  upon  the  bottom,  and 
into  the  middle  and  then  into  the  top  of  the  pile.  The 
bottom  did  not  create  or  help  to  create  the  top  of  the 
pile  any  more  than  the  top  created  or  helped  to  create 
the  bottom. 

You  could  not  have  a  glass  full  of  milk  unless  you 
had  some  milk  in  the  bottom  of  the  glass.  Yet  who  will 
say  that  the  milk  in  the  bottom  of  the  glass  produced 
or  participated  in  producing  the  milk  in  the  top  of  it? 
Who  would  say  that  the  milk  in  the  bottom  of  the  glass 


CAPITAL — WHAT  IS  MEANT  BY  "USED"  ?  73 

is  capital  and  is  entitled  to  pay  for  the  service  of  hold- 
ing up  the  milk  on  top? 

This  trick  of  sticking  a  new  name  on  an  old  thing 
has  a  wonderful  effect  of  fooling  us  for  a  little  while- 
A  gambling  room  is  called  a  tombola,  and  everybody 
thinks  it  is  something  different,  until  he  has  gone  into 
the  thing  and  finds  out.  When  I  was  a  boy  the  public 
drinking  places  in  this  country  were  called  bar-rooms. 
Presently  new  names  were  attached  over  their  doors. 
They  were  called  saloons,  then  sample  rooms,  then 
buffets,  then  grill  rooms.  Every  time  a  new  name  was 
tacked  on  it  suggested  that  the  thing  was  different- 
The  purpose  was  the  same.  It  was  to  make  your  mind 
defer  to  the  suggested  lure  that  here  is  something  su- 
perior, something  new  and  therefore  something  nice. 
But  every  time  that  we  went  into  one  of  these  places 
with  a  new  name  and  looked  it  over  we  found  out  that 
it  was  just  the  same  old  bar-room.  *  As  soon  as  such 
a  name  became  common  and  everybody  familiar  with 
it,  a  new  name  appeared. 

This  thing,  or  game,  or  institution,  whatever  you  may 
have  a  mind  to  call  it,  parading  as  capital  has  never  been 
gone  into  by  the  exploited  masses  before  our  generation 
and  looked  over  carefully.  But  we  are  now  going  into 
it,  and  are  tearing  down  the  curtains  and  draperies  and 
turning  the  search  light  into  the  dark  corners  and  private 
stalls.  And  we  find  that  this  mysterious  name  is  simply 
a  device  and  mask  of  the  same  old  occupation  of  the 
robber-barons  and  highwaymen  of  former  times. 

Yet  the  device  and  mask  is  most  crude  and  absurd. 
If  a  horse  be  employed  to  draw  coal  for  consumption 
under  the  boiler  of  a  freight  boat,  the  horse  and  the 
coal  are  both  capital  as  also  the  boat  because  "used  to 
produce  more  value."  This  same  horse  employed  to 
draw  coal  to  be  consumed  under  the  boiler  of  a  pleasure 


74  WHY  THE  CAPITALIST  ? 

yacht,  if  the  coal  is  being  sold  by  a  dealer  for  profit, 
is  still  capital,  but  the  coal  ceases  to  be  capital  as  soon 
as  it  is  delivered  to  the  pleasure  yacht.  Now  if  the 
horse,  the  coal  and  the  yacht  all  belonged  to  the  same 
man,  then  none  of  these  things  would  be  capital. 

Oats  fed  to  a  polo  pony  by  its  owner  are  not  capital- 
But  when  a  grocer's  delivery  horse  eats  oats,  though  out 
of  the  same  bag,  he  is  eating  capital. 

To  multiply  illustrations  any  further  does  not  seem 
to  be  necessary. 

In  the  use  of  this  distinguishing  name,  capital,  where 
there  is  no  distinction,  lurks  the  subtle  and  far-reaching 
deception.  It  insinuates  the  notion  of  a  change  in  the 
nature  of  value,  which  change  in  truth  has  never  taken 
place.  The  deception  is  rendered  all  the  more  mis- 
chievous because  suggested.  As  the  setting  hen  accepts 
as  her  own,  the  chicks  of  strange  eggs  hatched  by  the 
warmth  of  her  body,  so  in  like  manner  does  the  un- 
suspecting mind  accept  as  its  own  the  absurd  notions 
and  deductions  that  its  own  warmth  generates  from 
seeds  of  falsehood  insinuated  into  it  by  and  through  the 
wiles  and  powers  of  suggestion. 

It  is  boldly  claimed  that  wages,  so-called,  paid  for  pro- 
ductive labor  is  capital,  because  forsooth  it  is  value  used 
in  the  production  of  more  value.  The  truth  of  the  mat- 
ter is  that  the  worker  receives  nothing  until  after  he 
has  produced  the  full  value  from  which  he  receives  his 
allowance  called  wages.  So  far  as  the  worker's  wages 
are  concerned  it  cannot  in  the  first  place  be  said  that 
they  are  advanced  at  all,  or  that  the  value  that  is  called 
wages  is  capital.  That  value  could  surely  not  have  been 
used  in  the  production  of  more  value  when  it  was  not 
in  existence  at  the  beginning  of  such  production  and 
only  came  into  being  as  a  result  of  the  operation  of 
production. 


CAPITAL — WHAT  IS  MEANT  BY  "USED" ?  <0 

The  morgan  does  not  in  fact  pay  anything  to  the  pro- 
ductive worker,  because  the  worker  produces  and  give& 
up  to  the  morgan  in  advance  the  value  produced.  It  is 
the  morgan,  if  anybody,  that  takes  pay.  The  worker 
hands  over  large  quantities  of  value,  big  bills  as  it  were, 
to  the  morgan,  and  the  morgan  graciously  tosses  back 
a  little  small  change  to  the  worker.  The  amount  of 
the  small  change  depends  entirely  upon  how  much  it 
takes  to  maintain  the  worker  so  that  he  can  continue 
in  the,  to  the  morgan,  profitable  and  agreeable  occu- 
pation. 

The  fact  that  the  morgan  in  taking  the  value  pro- 
duced by  the  worker  is  actuated  by  the  motive  and 
purpose  of  changing  it  into  another  form  called  money 
cannot  make  any  difference  in  the  principle.  It  is  value 
in  the  form  that  he  gets  it,  and  it  is  value  after  he  has 
changed  it  into  the  form  of  money.  He  gets  value, 
returns  a  portion  of  it  to  the  man  he  got  it  from,  calling 
the  returned  portion  wages.  That  surely  is  not  advanc- 
ing wages  or  anything  else.  Nor  is  it  using  value  for 
the  production  of  more  value.  The  process  is  simply 
that  of  getting  another  to  produce  or  to  add  value  to 
the  material  worked  upon,  and  then  letting  him  have 
a  modicum  to  live  upon. 

The  purchase  of  raw  material  and  tools  by  the  mor- 
gan, in  its  essential  quality  consists  only  in  exchanging 
value  in  one  thing  for  value  contained  in  another  thing. 
What  difl'crence  is  there  in  the  command  to  fetch  a  case 
of  champagne  and  the  command  to  fetch  a  ton  of  coal ; 
or  between  carry  my  cane,  and  carry  that  bale  of  goods  : 
or  between  start  up  my  yacht  and  start  up  my  mill? 
True,  their  ultimate  or  remoter  purposes  may  be  and  are 
different.  But  the  exercise  of  the  power  and  the  immediate 
purpose  is  to  direct  the  movements  of  another  and  are  in 
their  nature  the  same.     It  is  commanding  others,  making 


1  6  WHY  THE  CAPITALIST  ? 

them  jump,  come,  go,  fetch  and  carry,  bring  things  to- 
gether, and  put  other  things  apart.  In  the  one  class  of 
cases  it  is  done  by  the  morgan  for  his  immediate  personal 
gratification,  for  the  mere  pleasure  of  seeing  men  jump  and 
run;  and  in  the  other  class  of  cases  it  is  for  the  same 
immediate  gratification  and  pleasure,  but  also  for  the  fur- 
ther purpose,  gratification  and  pleasure  that  the  morgan 
gets  from  raking  in  more  surplus  value.  For  this  further 
accretion  of  value  he  has  no  other  use  than  to  make  still 
other  and  more  men  jump  and  run  and  whine  for  bread. 
By  far  the  greatest  reason  that  the  morgan  has  to  have  pro- 
ductive work  go  on  is  the  gratification  to  his  self-love  that 
comes  from  being  able  to  direct  and  dictate  the  activities 
of  a  multitude  of  other  people,  if  not  directly,  then  in- 
directly, but  equally  if  not  more  effectively. 

The  word  "capital"  supports  a  fiction.  That  fiction 
is  that  the  accumulated  surplus  value  in  the  hands  of 
the  morgan,  and  produced  by  the  worker,  and  for  which 
the  worker  was  not  paid,  has  by  some  legerdemain  been 
turned  into  a  philosopher's  stone  that  lures  forth  more 
and  ever  more  surplus  value  from  the  beautiful  island 
of  somewhere  for  the  favored  morgan,  and  that  the 
worker  is  not  entitled  to  any  more  than  just  such  meagre 
portion  of  the  total  value  produced  as  will  be  sufficient 
to  keep  up  the  supply  of  workers. 


CHAPTER  VII. 
CAPITAL  PRODUCTION. 

All  production,  of  whatever  kind  or  nature,  consists 
in  the  bringing  together  or  the  separation  of  things. 
It  is  carrying  and  fetching.  Nature  produces  a  potato 
by  bringing  together  water,  starch,  sugar,  albumen, 
gum,  asparagin,  fat,  solamin,  nitrogenous  substance  and 
ash.  She  produces  beef  by  bringing  together  water,  pro- 
tein, fat  and  ash.  She  produces  air  by  bringing  together 
oxygen  and  nitrogen.  She  produces  water  by  bringing  to- 
gether hydrogen  and  oxygen.  Nature  brings  together  all 
the  ingredients  of  honey  and  deposits  them  in  the  many 
different  kinds  of  blossoms.  Bees  gather  this  honey  to- 
gether in  their  hives  and  man  takes  it  from  there  to 
market.  YVe  say  that  the  bees  make  the  honey.  But 
every  act  in  the  process  by  which  the  honey  is  produced 
and  finally  placed  upon  the  market  consists  of  carrying 
and   fetching,   combining   and   separating. 

Man  separates  the  potato  from  the  ground,  brings  it 
into  contract  with  salt  and  water,  and  boils  it  in  a  pot, 
or  bakes  it  in  an  oven.  By  continuing  the  process  of 
separating  things  and  bringing  things  together,  man 
produces  food  from  the  potato  that  was  in  the  ground. 
Man  kills  the  ox.  This  facilitates  the  operations  to 
follow.  He  removes  the  hide  and  the  offal.  Then  he 
separates  the  carcass  into  a  number  of  parts,  carries  the 
parts  to  a  number  of  different  places  for  further  dis- 
tribution. The  separation  into  parts  and  the  distribution 
is  continued.  The  beef  is  brought  together  with  water, 
vegetables  or  cereals,  and  seasoning,  and  is  boiled  in  a 
pot.     Then  we  have  soup.     Some  of  the  beef  is  roasted 

77 


78  WHY  THE  CAPITALIST? 

and  thereby  its  particles  brought  into  other  relationships 
with  each  other,  and  into  combination  with  other  articles 
of  food.  There  we  have  a  dinner  produced.  Brought 
together  and  boiled  with  potatoes,  cabbages,  beans,  peas, 
onions  and  what  not,  a  New  England  boiled  dinner 
is  produced.  The  coal,  wood,  stove,  fire,  etc.,  were  also 
brought  together  to  produce  the  desired  result. 

A  tree  is  cut  down.  This  is  a  removal  of  the  tree 
from  its  position  in  the  earth.  Its  branches  are  lopped 
off,  the  trunk  sawed  up  into  boards,  sills  and  scantlings ; 
all  a  removal,  a  severing  of  one  thing  from  another. 
Then  the  separated  parts  of  that  tree  are  carried  away, 
maybe  on  a  railroad  train,  brought  together  with  sepa- 
rated parts  of  other  trees,  and  when  bricks,  mortar. 
nails,  glass,  paint,  oils,  putty,  iron,  locks,  hinges,  etc., 
are  brought  into  proper  relationship  with  them,  a  house 
is  the  result.  Every  time  a  board  is  sawed  a  portion 
of  that  board  is  removed  from  another  portion,  there  is 
a  displacement  of  matter.  Every  time  a  board  is  nailed 
into  a  position  in  the  house,  it  is  a  bringing  of  matter 
together  with  other  matter.  These  illustrations  might 
be  multiplied  ad  infinitum. 

Enough  has  been  shown  to  make  clear  the  point  that 
all  process  of  production,  both,  chemical  and  mechanical, 
consists  of  bringing  and  carrying  of  things,  changing 
their  position  and  relation  to  each  other.  This  in  chemistry 
extends  from  the  cooking  of  a  potato  to  the  making  of  an 
ingot  of  steel,  and  in  mechanics,  from  the  peeling  of  a 
potato  to  the  operation  of  a  railroad  train. 

The  same  principle  holds  true  in  every  field  of  pro- 
duction engaged  in  by  man.  In  agriculture,  man  sup- 
plements the  work  of  nature  in  separating  things  and 
bringing  things  together.  First,  man  only  picked  the 
fruit  and  nuts,  gathered  the  grain  and  dug  the  roots 
for  food.    He  learned  in  time  that  he  got  more  and  bet- 


CAPITAL — PRODUCTION  79 

ter  fruit,  nuts,  grain  and  roots  whenever  the  plants  pro- 
ducing these  things  had  freer  access  to  nature's  chemical 
stores.  So  he  trimmed  away  surrounding  foliage  and 
pulled  up  crowding  weeds  that  absorbed  the  substances 
that  his  fruit,  grain  and  root  growing  plants  required, 
and  loosened  the  surrounding  soil.  After  a  while  he 
made  clearings,  tilled  the  soil,  planted  and  transplanted 
the  fruit,  grain  and  roots,  and  kept  the  weeds  out.  He 
learned  to  add  fertilizer  to  the  soil.  Then  he  learned 
to  graft  from  one  plant  to  another,  acquired  the  secrets 
of  crossing  and  pollenization,  improving  and  diversify- 
ing the  fruits,  grains  and  roots.  All  this  amounted  to 
enhancing  the  effect  of  the  operation  of  natural  forces 
in  separating  certain  things  from  the  cultivated  plants 
and  in  bringing  other  things,  and  more  in  quantity  of 
them,  to  the  plants  cultivated,  rendering  them  more 
fruitful,  useful  and  desirable  to  man.  In  all  of  these  acts 
man  merely  followed  the  laws  of  nature  as  he  came  to 
understand  them.  In  removing  and  keeping  the  things 
not  wanted  away  from  the  things  wanted  in  the  plant, 
and  in  enhancing  the  flow  of  and  bringing  the  things 
wanted  together  in  and  to  the  plant  life  he  supplemented 
the  work  of  nature.  Thus  analyzed,  we  find  that  agri- 
culture is  the  carrying  and  bringing  of  things.  That 
the  agriculturist  is  dependent  upon  nature,  and  natural 
laws  do  not  affect  the  principle.  In  the  other  opera- 
tions of  man  spoken  of,  he  was  also  dependent  upon  na- 
ture and  natural  laws.  In  making  the  fire,  cooking  the 
dinner  and  casting  the  ingot,  he  was  dependent  upon 
the  forces  and  laws  of  chemistry;  in  cutting  up  the  tree 
into  boards  he  was  dependent  upon  the  wedge  in  me- 
chanics, and  in  transporting  the  material  he  was  depend- 
ent upon  the  wheel,  another  principle  in  mechanics. 

To    say    that    nature    herself    makes    the    plant    grow 
is  no  more  argument  in  opposition  than  to  say  that  the 


80  WHY  THE  CAPITALIST? 

raftman  or  boatman  did  not  bring  his  logs  or  cargo  down 
the  river,  because  the  water  in  the  river  carried  the  raft 
or  cargo,  or  because  the  current  was  sufficient  to  move  it 
along  and  all  the  man  did  was  to  guide  it  safely  down 
the  stream ;  or  that  the  woodman  did  not  bring  the  log 
down  the  hill  because  he  put  to  good  use  the  law  of 
gravitation ;  or  that  the  smith  did  not  make  the  horse 
shoe  in  bringing  the  different  particles  of  iron  into  dif- 
ferent relative  positions,  because  forsooth  he  first  had 
the  fire  to  heat  the  iron.  It  may  in  fact  be  said  that 
in  every  thing  that  man  does  in  bringing  and  carrying, 
he  utilizes  nature's  forces  and  laws.  In  peeling  a  potato 
he  uses  nature's  mechanical  law  found  in  the  wedge 
by  having  that  wedge  made  into  a  knife  that  enables  him 
to  cut  the  potato. 

In  literature  the  same  thing  holds  true.  In  writing 
this  book  I  am  bringing  together  different  thoughts — 
and  these  are  also  things.  Many  of  these  have  been 
brought  together  before.  Some  of  them  have  not,  per- 
haps, been  brought  together  before  in  just  this  way. 
I  am  bringing  them  together  to  meet  a  want,  as  I  be- 
lieve. That  is  my  labor.  I  shall  also,  I  hope,  remove 
things  erroneous,  incumbering  notions.  If  I  succeed  in 
my  purpose,  I  shall  succeed  in  removing  things  from 
the  mind,  things  that  obstruct  and  prevent  clear  and 
fruitful  thinking  on  the  subjects  treated.  The  same 
holds  true  as  to  music  and  the  stage,  and  all  the  fine  arts. 
Every  block  of  marble  contains  within  it  a  beautiful 
statue.  All  of  the  sculptors  art  consists  in  separating  the 
statue  from  the  surplusage  of  marble. 

Every  true  educator  brings  things  together  for  the 
mind  of  the  student  or  apprentice.  He  also  removes 
things  that  litter  up  the  mind  and  obstruct  healthful, 
productive  mental  or  physical  work.  More  than  all.  if  he 
is  in  reality  an  educator,  he  cultivates  or  assists  in  culti- 


CAPITAL — PRODUCTION  81 

vating  the  mind  of  his  pupil  or  apprentice  so  that  it 
will  continue  on  throughout  life  to  bring  things,  carry 
things,  separate  things,  analyze  things,  combine  things; 
producing  health  and  comfort  for  the  student  or  appren- 
tice, and  untold  benefit  to  others.  And  every  benefit  that 
the  pupil  or  apprentice  achieves  or  confers  in  after  life  is 
contributed  to  in  a  large  measure  by  his  teacher. 

The  surgeon  and  the  doctor  of  medicine  bring  and 
carry  things  in  the  practice  of  their  profession.  They 
eliminate  the  harmful  and  introduce  the  beneficial.  This 
is  true  whether  it  be  done  with  the  knife,  with  medicine 
or  with  advice  and  instruction  in  hygiene  and  regimen.  It 
is  in  principle  the  same  as  with  the  educator,  or  the  boat- 
man. 

I  have  not  attempted  to  enumerate  all  of  the  occupa- 
tions engaged  in  bringing  things  together  or  carrying 
them  apart. 

The  transporter  is  therefore  also  a  producer  of  value 
in  so  far  as  he  carries  things  from  one  place  to  another 
where  needed  to  supply  human  needs.  The  merchant  in 
so  far  as  he  distributes  things  to  the  persons  requiring 
them  is  also  a  producer  of  value.  This,  however,  does 
not  mean  that  the  mere  transfer  of  the  title  of  things 
by  the  merchant  produce  value.  Far  from  it.  The  trans- 
fer of  title  does  not  produce  any  value  whatever.  That 
is  merely  incidental  to  the  service  of  distribution  under 
the  present  conditions  of  society.  It  is,  however,  made 
the  means  of  taking  profit.  This  is  quite  different  from 
receiving  in  return  for  the  service  of  distribution  an 
equivalent  of  the  value  produced. 


CHAPTER  VIII. 

CAPITAL. 

Capital  Produces  Nothing.    How  Value  is  "Used"  in  the 
Production  of  More  Value. 

By  the  aid  of  the  fiction  created  by  the  use  of  the 
word  "capital,"  the  exploitation  of  the  workers  is  con- 
cealed as  in  a  cloud  of  dust.  The  name  "capital"  connotes 
a  difference  in  values  where  there  is  none.  It  connotes 
a  difference  in  attributes  and  qualities.  This  constitutes 
one  of  the  basic  falsities  that  underlie  the  conventional 
political  economy  of  our  time. 

Conventional  economists  say  that  capital  and  labor 
are  both  actively  engaged  in  the  production  of  value 
and  that  capital  is  entitled  to  compensation  for  its  ser- 
vices just  as  labor  is  entitled  to  such  compensation.  Both 
these  pretensions  are  unqualifiedly  false.  There  should 
be  no  need  to  prove  their  falsity,  for  the  burden  of  proof 
rests  upon  those  who  make  the  assertions.  But  instead 
of  making  any  proof,  they  have  always  been  content  with 
naked  repeated  assertions  supported  by  nothing  but 
parade,  prestige,  and  that  show  of  responsibility  that 
brute  force  gives  to  accumulations  of  wealth. 

Ordinarily  it  is  difficult  to  prove  a  negative,  but  it  is 
not  difficult  here.  Since  I  dispute  the  right  to  use  the 
word  "capital"  in  this  connection  in  the  sense  that  it  is 
employed,  I  shall  decline  to  become  enmeshed  in  its 
net  of  fiction  by  using  it  in  this  chapter,  and  shall 
discuss  the  naked  subject  of  that  value  which  enters  into 
the  production  of  more  value. 

That  value  which   is   "used"  in  the  creation  of   more 

82 


CAPITAL — PRODUCES  NOTHING  83 

value,  is  simply  transmitted  and  made  to  fuse  with,  or 
merge  into  the  additional  value  subsequently  created 
by  human  effort.  This  is  true  whether  the  value  so 
"used"  be  contained  in  the  raw  material  that  enters  into 
the  new  product,  or  whether  it  be  contained  in  the  ma- 
terial consumed  in  the  process  transmitting  the  value  in 
the  material  consumed  into  the  new  product,  or  whether 
it  be  in  tools,  machinery  and  buildings  that  by  use  and 
wear  have  the  value  contained  in  them  gradually  trans- 
mitted into  the  new  product. 

As  labor  created  the  first  value,  the  discussion  resolves 
itself  into  one  concerning  the  method  and  sequence  of 
labor. 

A  goes  into  a  forest,  not  yet  appropriated  by  the  mor- 
gan. His  purpose  is  to  fell  and  cut  up  a  tree  for  fire- 
wood to  sell.  He  clears  away  the  underbrush  about  a 
tree  so  as  to  be  able  to  work  more  advantageously. 
As  between  himself  and  the  rest  of  human  society,  he 
by  that  labor  creates  and  imparts  to  the  land  about  the 
tree  a  value  that  is  to  be  used  in  the  production  of  more 
value.  The  value  now  newly  created  lies  in  the  resulting 
advantage  in  being  unimpeded  in  the  work  of  chopping 
down  the  tree.  Will  any  one  contend  that  this  advantage 
or  value  swings  the  axe  against  the  tree?  The  advantage 
is  a  value  only  if  it  be  transmitted  into  the  firewood  that 
is  yet  to  be  produced  by  further  labor.  If  it  be  not  so 
transmitted,  then  it  was  only  speculative,  and  failed  of 
fruition.  If  A,  after  clearing  away  the  underbrush, 
concludes  to  spare  the  tree  and  turns  his  attention  to 
other  things,  and  no  one  else  takes  up  and  continues  the 
work,  then  the  value  created  in  clearing  away  the  un- 
derbrush disappears.  The  existence  of  the  value  in  the 
clearing  was  conditional  and  dependent  upon  its  being 
utilized  by  transmission  into  the  wood  of  the  tree  by 
further  labor.     In  this   respect  the  value  in   the  clearing 


84  WHY  THE  CAPITALIST  ? 

occupies  precisely  the  same  position  as  the  value  in  tools 
and  machinery. 

Now,  assume  that  A  fells  the  tree.  With  every  stroke 
of  the  axe  he  is  creating  value,  beginning  even  with  the 
first  stroke.  Each  succeeding  stroke  adds  more  value 
to  the  value  produced  by  the  preceding  strokes  and 
brings  the  value  created  by  them  nearer  and  nearer  to 
fruition.  Without  a  first  stroke  there  cannot  be  a  sec- 
ond stroke;  without  the  second  there  cannot  be  a  third, 
and  so  on  until  the  tree  falls.  Each  stroke  of  the  axe 
creates  a  value  that  is  transmitted  and  merged  into  the 
greater  value,  simultaneously  with  the  creation  of  more 
value  by  more  labor.  This  constant  transmission,  merg- 
ing and  shoving  forward  of  the  ever  increasing  value 
with  and  into  the  ever  newly  created  value  continues 
until  the  tree  falls.  Yet  every  particle  of  this  value,  that 
resulting  from  the  first  chop  of  the  axe  and  that  re- 
sulting from  every  succeeding  blow,  until  the  last  one  is 
given,  is  continuously  dependent  upon  the  labor  subse- 
quently performed  and  to  be  performed  to  rescue  it  from 
evanishment;  and  this  continues  to  be  so  until  the  tree 
is  cut  into  lengths  and  split  up  into  pieces  of  the  required 
dimensions  for  firewood.  Until  then  all  value  is  contin- 
gent, depending  upon  the  further  expenditure  of  labor  for 
its  continuation  and  realization.  All  of  the  value  as  fast 
as  it  was  created  by  each  chop  of  the  axe,  constituted, 
according  to  conventional  economists,  the  basis  of  and  was 
"used  in  the  production  of  more  value"  until  the  indi- 
vidual sticks  of  firewood  lay  in  the  pile.  During  this 
course  of  labor  all  of  the  value  so  long  as  it  entered  into 
further  operations  came  strictly  and  fully  within  the 
classical  definition  of  capital. 

When  the  tree  is  down,  A  lops  off  the  encumbering 
small  branches  and  foliage,  thereby  continuously  creat- 
ing more  value  by    his    labor  that  as  continuously  goes 


CAPITAL — PRODUCES  NOTHING  85 

into  the  prostrate  tree.  In  doing  this  he  steps  up  on 
the  trunk  of  the  tree  and  into  the  branches,  using  them 
instead  of  a  step  ladder,  thus  applying  also  as  a  tool  in 
the  creation  of  more  value  the  value  already  created. 
Then  A  cuts  the  trunk  and  limbs  into  the  desired  lengths, 
and  proceeds  to  split  the  wood  into  pieces  of  the  thick- 
ness required  for  final  use.  In  so  doing  this  he  finds  that 
his  work  is  facilitated  by  using  a  thick  piece  fi«om  time 
to  time  to  lean  other  pieces  against.  He  thus  can  pro- 
duce more  split  wood  in  a  like  time  than  otherwise. 
These  thick  pieces  so  applied  represent  value  and  are  ap- 
plied in  the  course  of  producing  more  value. 

Let  us  now  vary  the  case  a  little.  Suppose  two 
men,  A  and  B,  both  in  need  of  firewood  and  both  having 
the  same  right  in  this  primeval  forest,  and  both  also 
owning  axes,  mauls  and  wedges,  and  both  equally  pro- 
ficient in  felling  trees  and  splitting  wood.  They  select 
the  tree  together.  On  the  first  day  of  work  B  is  other- 
wise engaged.  A  goes  to  the  tree  in  the  forest  alone, 
clears  the  surrounding  ground,  fells  the  tree,  lops  the 
brush  off  and  cuts  the  trunk  into  the  lengths  required, 
consuming  the  day  in  this  work.  The  next  day  A  has 
other  work  to  do,  and  B  goes  into  the  forest  alone.  B 
splits  the  wood  up  in  the  same  manner  as  in  the  first  in- 
stance related,  divides  it  into  two  piles  of  equal  size,  one 
for  himself  and  one  for  A.  He  also  consumes  a  whole 
day  in  this  work. 

Now,  supposing  A  claims  that  he  should  have  more 
than  an  equal  half  for  furnishing  the  capital.  Suppose 
he  says  to  B,  "I  did  as  much  work  as  you  did,  for  which 
I  am  entitled  to  as  much  as  you,  and  besides  that  I  fur- 
nished the  capital  without  which  you  could  not  have 
produced  such  an  amount  of  firewood.  If  I  had  not 
cleared  away  the  underbrush  and  felled  the  tree  first  and 
cut  it  into  lengths  you  could  not  have  split  it  up,  for  it 


86  WHY  THE  CAPITALIST  ? 

would  have  been  impracticable  and  well  nigh  impossible 
for  you  to  climb  the  standing-  tree  and  split  it  up;  if  I 
had  not  cut  the  trunk  into  lengths  you  would  not  have 
had  large  pieces  to  use  from  time  to  time  as  chopping 
blocks.  That  which  I  produced  became  the  capital  for 
you  to  work  with  and  upon,  and  greatly  enhanced  the 
amount  of  value  finally  produced.  My  industry  fur- 
nished the  capital,  that  capital  was  mine  and  I  am 
entitled  to  the  benefit  of  what  it  produced  when  it  was 
working  together  with  you.  Capital  and  labor  must 
work  together  and  in  harmony.  That  cannot  be  if  labor 
claims  and  takes  all  that  is  produced  by  their  joint  ef- 
forts. Capital  must  have  its  just  compensation.  There- 
fore, I  will  take  the  one  pile  for  my  labor  of  the  first 
day  and  five-sixths  of  the  other  pile  for  the  work  of  my 
capital  on  the  second  day.  One-sixth  of  the  second  pile 
is  all  you  need.  The  rest  must  be  given  to  capital.  Fair 
dealing  demands  it.  Anything  less  would  be  unjust  and 
unreasonable !" 

Now  does  A  do  an3Tthing  less  if  he  succeeds  in  be- 
fuddling B,  than  filch  from  B  the  results  that  flow 
from  an  orderly  co-operation  and  method  in  felling  the 
tree  first  instead  of  beginning  at  the  top  to  cut  it  up  whilst 
standing? 

Suppose  A  at  the  close  of  his  first  day,  or  at  any 
time  in  the  transaction,  had  sold  out  to  C,  would  that 
make  any  difference  in  the  nature  of  the  transaction  or 
the  principle  involved?  The  sale  by  A  of  his  interest 
or  labor  at  the  close  of  the  day  to  C,  or  the  juggling  of 
A's  property  or  title  in  the  value  that  he  had  produced 
from  one  to  another  or  any  number  of  "capitalists" 
could  not  by  any  possible  legerdemain  have  breathed 
the  breath  of  life  into  this  value  which  C  now  calls 
capital  or  cause  it  to  perform  any  work  whatsoever. 

Take  the  case  of  tools  already  touched  on  but  in- 


CAPITAL — PRODUCES  NOTHING  87 

cidentally.  The  principle  is  exactly  the  same.  A,  having 
no  tools,  wants  to  fell  trees  in  this  forest.  He  finds  a 
deposit  of  iron  ore  and  also  some  lime  stone,  builds  a 
crude  little  furnace,  in  it  burns  value  containing  fuel, 
makes  an  axe,  gets  a  hickory  stick,  fits  it  into  the  axe, 
proceeds  to  fell  trees  and  splits  up  the  wood,  which  he 
sells.  The  axe  is  called  "capital."  When  A  made  the 
axe,  he  produced  value.  The  conventional  economist 
say  that  this  value  is  used  in  the  production  of  more 
value.  That  is  a  specious  truth,  pregnant  with  a  far- 
reaching  false  implication.  The  conventional  economists 
take  the  position  that  the  value  uses  itself  up  in  co- 
operation with  labor  in  producing  more  value.  If  it  be 
conceded  for  the  purposes  of  the  argument  that  the  value 
is  "used,"  then  it  is  untrue  that  it  uses  itself,  it  is  not 
active  but  entirely  passive.  And  if  we  still  concede  that 
it  is  "used,"  then  it  is  labor  alone  that  does  the  using. 

But  the  truth  of  the  matter  is  that  the  value  is  not 
used.  Only  the  corporeal  form  is  used,  or  changed.  The 
value  is  not  used  or  consumed.  It  is  merely  passed  on 
by  labor  in  the  course  of  the  creation  of  more  value. 
When  you  turn  an  electric  current  into  a  perfect  con- 
ductor, it  is  not  being  used  by  passing  through  the  con- 
veyor, its  use  occurs  only  with  its  application  to  its  final 
purpose.  When  you  pour  water  from  a  pitcher  into 
drinking  glasses,  you  are  not  using  the  water,  you  are 
only  passing  it  along,  changing  the  vehicle  or  package, 
as  it  were. 

When  A  fells  trees  and  chops  them  up  he  is  by  grada- 
tions transferring  the  previously  created  value  contain- 
ed in  the  axe  into  the  firewood,  whilst  he  is  at  the  same 
time  creating  more  value.  He  continues  doing  so  as 
long  as  he  continues  felling  and  chopping  up  trees  with 
that  axe.     When  the  axe  is  worn  out  all  of  the  value 


88  WHY  THE  CAPITALIST? 

that  it  contained  will  have  been  transmitted  by  grada- 
tions into  the  wood  produced. 

Does  it  alter  the  principle  that  when  A  made  the  axe 
he  made  99  other  axes  for  99  other  poeple  who  rendered 
him  an  equivalent  in  value  contained  in  other 
things  for  them?  Or  does  it  alter  the  principle  that 
some  other  person  made  the  axe  for  A  whilst  he  was 
doing  something  else  in  return  for  the  axe-maker,  or 
that  he  gave  in  exchange  value  contained  in  some  other 
thing?  Or  does  it  alter  the  principle  in  the  least  that  in 
the  exchange  of  the  service  of  A  for  the  service  of  the 
axe-maker  a  confusing  medium  called  money  entered 
into  the  transaction?     I  think  not. 

An  axe  is  simply  and  only  a  combination  of  mechan- 
ical powers,  namely,  the  wedge  and  the  lever.  The  axe 
is  the  wedge  and  the  helve  is  the  lever.  Here  then  he 
has  had  heat,  the  wedge  and  the  lever.  Every  step  in 
the  process,  beginning  with  the  digging  of  ore,  that 
led  to  the  final  purpose  of  A  to  have  the  trees  piled  up 
in  cordwood,  was  a  necessary  precedent  to  those  fol- 
lowing; every  succeeding  step  merely  carried  along  the 
value  previously  created  and  embodied  it  in  combina- 
tion with  and  in  addition  to  the  newly  created  value ; 
none  of  the  earlier  steps  could  be  of  any  ultimate 
useful  purpose  or  benefit  to  man,  or  if  ultimate  value, 
unless  followed  up  by  the  succeeding  steps.  The  furnace 
was  not  of  any  use  without  the  making  of  a  fire  nor  the 
fire  without  the  bringing  of  the  iron  ore  nor  the  iron 
ore  without  the  smelting,  nor  the  smelting  without  the 
making  of  the  axe,  nor  the  axe  without  the  making  of 
the  helve,  nor  that  without  the  cutting  up  of  the  trees  into 
fire  wood,  the  final  end  and  purpose  of  the  series  of 
actions. 

Many  additional  illustrations  might  be  given.  In 
building  a  wall  we  lay  the  first  layer  of  stone  at  the 


CAPITAL — PRODUCES  NOTHING  89 

bottom.  That  carries  the  succeeding  layers,  course  after 
course.  Each  course  constitutes  value  and  is  applied- 
"used"  the  conventional  economists  would  say,  in  pro- 
ducing more  value.  You  could  not  build  the  wall  with- 
out the  "assistance"  of  the  first  course.  Therefore  the 
first  course  should  also  be  called  "capital,"  and  ought  to 
share  in  the  pay  for  the  upper  courses.  You  cannot 
hem  a  handkerchief  without  applying  the  first  stitch  to 
produce  the  second  and  third,  and  so  on  and  on. 

The  preceding  acts  furnish  a  basis,  their  effect  is  trans- 
mitted and  their  value  added  to  the  succeeding  acts.  The 
succeeding  acts,  on  the  other  hand,  furnish  a  motive 
and  purpose  and  give  value  to  the  preceding  acts.  It 
would  be  folly  and  a  useless  waste  of  energy  to  make 
axes  if  that  work  were  not  to  be  followed  by  further 
acts  of  production.  To  the  claim  that  the  more  direct 
and  intermediate  result  of  the  acts  prior  in  time  should 
be  given  an  extra  name  "capital"  and  awarded  an  extra 
compensation  to  be  paid  out  of  the  result  of  the  subse- 
quent acts,  it  is  a  complete  answer  that  the  subsequent 
acts  rescue  the  prior  from  futility,  without  the  subse- 
quent acts,  the  results  of  the  prior  acts  would  never  be 
realized.  The  results  of  the  subsequent  acts  have  as 
valid  a  claim  to  the  higher  consideration  and  as  good  a 
right  to  demand  extra  compensation  or  premium,  over 
and  above  the  pay  for  the  workman's  work.  Such  a 
claim  is  equally  as  valid  as  the  other.  Each  neutralizes 
the  other. 

It  probably  will  surprise  some  to  be  told  that  the  doc- 
trine of  the  superior  right  of  the  subsequent  over  the 
precedent  has  for  a  long  time  been  and  is  still  recognized 
and  given  validity  in  maritime  law.  But  it  is  only  to 
serve  the  interest  of  the  morgans.  Tn  other  words,  when 
the  interests  of  the  "capitalist"  are  to  be  subserved  by 
doing  so  the  rule  is  that  the  precedent  has  rights  above 


90  WHY  THE  CAPITALIST? 

and  loaded  upon  the  subsequent,  and  when  the  interests 
of  the  "capitalist"  are  to  be  subserved  by  reversing  the 
rule,  the  rule  is  reversed  and  the  subsequent  is  given  a 
superiority  over  and  loaded  upon  the  precedent.  This 
is  found  in  maritime  liens.  There  the  last  claims  upon  a 
vessel  for  supplies,  repairs  or  services  rendered  the  ves- 
sel to  facilitate  its  use  as  an  instrument  of  naviga- 
tion, impress  upon  it  a  maritime  lien.  These  liens  are 
given  precedence  in  the  inverse  order  of  their  crea- 
tion, the  later  ones  being  first  recognized  and  the  earlier 
ones  taking  whatever  of  value  may  be  left.  This  rule 
rests  upon  the  specious  reasoning  that  it  is  in  the  inter- 
ests of  the  nation  and  navigation  to  pay  those  first  who 
assist  in  preserving  the  property  and  furthering  the  mari- 
time enterprise  for  the  benefit  of  the  staler  claims.  But 
the  real  purpose  is  to  let  the  ship  owner  evade  liability 
if  his  unseaworthy  and  played-out  hulk  should  go  to 
the  bottom  of  the  sea.  All  claims  of  sailors  for  wages 
and  other  services  rendered  the  ship-owning  morgan, 
are  enforceable  against  the  vessel  only  and  not  against 
the  owner.  The  proceedings  to  collect  such  claims  are 
called  proceedings  in  rem,  that  is,  they  are  against  the 
thing.  If  the  thing  goes  down,  the  sailors'  claims  go 
down  too.  The  morgan,  however,  gets  the  profits  as 
long  as  the  ship  is  useable.  It  is  a  case  of  "heads  I  win, 
tails  you  lose." 

What  has  been  said  of  the  axe  and  the  wood-chopping 
enterprise  applies  to  every  other  productive  enterprise. 
The  axe  is  a  simple  tool.  Yet  its  production  involves  the 
application  of  the  forces  and  laws  of  nature.  The  pro- 
duction and  use  of  the  axe  are  an  application  of  the 
principles  of  mechanics  found  in  any  machine.  The 
value  contained  in  the  most  complicated  and  elaborate 
machine  follows  the  same  principle  and  is  transferred 
into  the  final  product  by  further  labor.     It  is  simply  a 


CAPITAL — PRODUCES  NOTHING  91 

pushing-  along,  a  transmission  of  value  from  one  thing 
to  another,  like  the  pouring  of  cream  from  a  pitcher  into 
a  dozen  small  cups. 

As  to  factory  buildings,  the  principle  is  identical. 
They  are  erected  for  the  purpose  of  ultimately  produc- 
ing the  things  that  are  sent  out  of  them,  and  they  con- 
stantly depreciate  as  their  value  is  being  transmitted 
piece  meal  to  the  goods  manufactured.  If  building  and 
machinery  remain  idle,  their  purpose  is  not  realized ; 
they  depreciate  and  go  to  waste.  This  value  is  fully 
dependent  on  further  labor  for  its  application  and  con- 
tinued existence.  The  laws  of  nature  are  constant  and 
inexorable.  Nothing  is  static.  Everything  is  dynamic, 
Everything  must  move  or  be  ground  to  dust.  So  with 
that  property  attached  to  and  invested  in  material 
things,  that  property  called  value.  It  must  be  contin- 
uously in  transmission  from  one  material  thing  into  an- 
other. It  goes  from  the  axe  into  the  wood,  from  the 
plow  into  the  grain,  from  the  factory  into  the  output,  from 
the  railroad  into  the  goods  transported.  For  this  transmis- 
sion of  value  and  its  rescue  from  inevitable  destruction,  the 
morgan  calling  himself  a  "capitalist"  is  wholly  dependent 
upon  the  willing  hands  and  brain  of  the  gentile  worker  who 
in  the  act  of  rescue  and  transmission  of  value  creates  ever 
more  and  more  value. 

The  principle  is  the  same  as  to  improvements  upon 
land.  The  man  who  makes  the  improvements  puts  value 
into  the  land.  He  has  thereby  created  value  and  has  a 
right  to  demand  an  equivalent  of  that  value  from  any 
one  to  whom  he  turns  over  the  land.  But  his  improve- 
ments do  not  themselves  participate  in  the  creation  of 
any  subsequent  value.  The  value  in  the  land  is  simply 
transmitted.  The  subsequent  work  of  the  worker  adds 
more  value  to  what  was  created  before. 

The   labor   power   that   creates   all  value,   preserves  it, 


92  WHY  THE  CAPITALIST? 

transmits  it  and  enhances  in  preserving  and  transmit- 
ting, it  by  adding  to  it  still  more  value.  Hence  labor 
power  is  the  basis  of  all  values.  It  is  not  embodied  in 
any  material  thing  outside  of  man  himself.  It  springs 
from  and  is  dependent  upon  life.  Human  life  is  depend- 
ent upon  the  sustenance  contained  in  the  free  goods  of 
nature,  produced  by  natural  forces,  supplemented  by  the 
expenditure  of  human  labor  power.  Without  its  daily 
supply  of  this  sustenance,  life  would  soon  end  and  with 
it  the  power  to  labor.  The  gentile  of  the  first  order  by 
reason  of  the  meagre  dole  called  wages,  which  is  just 
sufficient  for  him  to  live  upon  and  produce,  can  accumu- 
late but  very  little  of  a  reserve  store  of  the  means  to  buy 
of  the  free  goods  of  nature  and  value  imparted  to  them  by 
labor. 

The  means  of  existence  are  held  by  the  morgan  in 
large  surplus  quantities  and  they  do  not  succumb  nearly 
so  fast  to  the  ravages  of  nature  as  human  life  does.  As 
this  surplus  will  sustain  life  the  morgan,  so  long  as 
he  can  successfully  maintain  his  claim  to  exclusive  own- 
ership, can  sit  down  and  eat  as  much  of  it  as  he  wants 
to  and  let  the  remainder  go  to  waste,  whilst  the  rest 
of  humanity  looks  on  until  it  perishes. 

When  the  morgan,  whether  by  initial  industry,  or  by 
force  or  fraud,  or  by  means  of  glass  beads  or  bribery,  or 
by  this  or  that  hocus  pocus,  produced  or  under  color 
of  law  possessed  himself  of  the  result  of  the  work  which 
in  the  nature  of  things  has  to  be  performed  first  in  the 
order  of  production,  pasted  the  mystifying  label  "capital" 
upon  it  and  insisted  that  the  bulk,  or  any  portion,  of 
the  subsequently  added  value  be  handed  over  to  him  as  a 
condition  that  he  permit  the  process  of  production  to  go 
on,  he  became  an  interceptor.  Like  the  highwayman, 
he  commands  the  road  and  calls  upon  all  the  rest  of  us 
to  stand  and  deliver.     But  he  is  a  lawful  highwayman. 


CAPITAL — PRODUCES  NOTHING  93 

He,  in  fact,  makes  the  law,  and  his  law  says  that  he  may 
throw  the  wooden  shoe  into  the  machine  and  so  stop 
production  until  his  terms  and  conditions  are  accepted 
at  discretion.  In  fact,  he  may  do  so  whenever  he  likes. 
There  we  find  the  most  frequent  application  of  the  idea 
of  sabotage.  Sabotage  is  to  stop  the  mac'hine.  It  can 
make  no  difference  if  this  stoppage  be  accomplished  by 
drawing  the  fires  from  under  the  boilers  or  by  throw- 
ing a  sabot  into  the  gearing,  or  by  locking  the  mill  gate. 


CHAPTER  IX. 

THE  EVALUATION  OF  CAPITAL  AND  RATING 
OF  PROFITS. 

.We  have  seen  that  all  production  consists  of  bringing 
and  carrying  things,  changing  the  shape,  position  and 
relationship  of  substances  to  meet  ever  varying  human 
wants  and  requirements.  The  morgan,  by  reason  of  his 
power,  exercised  through  his  state,  clubbing  all  gentiles 
away  from  the  resources  of  nature,  which  he  calls  his 
property,  as  a  matter  of  course  obtains  at  the  start  com- 
plete control  of  all  the  things  that  have  to  be  brought, 
carried,  combined,  separated  or  fashioned.  He  controls 
production. 

The  morgan  "capitalizes"  this  power,  intermingling 
it  with  surplus  value  created  by  the  unpaid  labor  of  the 
gentile  worker,  calling  it  all  "capital."  He  then  attaches 
an  arbitrary  valuation  to  this  "capital,"  based  upon  the 
extent  of  his  power  to  wring  out  profits,  in  the  way  of 
more  surplus  value,  from  the  unpaid  labor  of  the  gentile 
worker,  and  then  he  justifies  his  profit  and  the  rate  and 
extent  of  it  by  that  same  evaluation  of  his  so-called  cap- 
ital. 

The  morgan,  by  exercising  proprietary  dominion  over 
all  the  storehouse  of  nature,  exercises  a  relentless  pro- 
prietorship over  all  the  things  of  nature  that  he  can 
seize  and  that  belong  in  the  list  of  what  I  have  been 
calling  the  free  goods  of  nature.  He  thereby  holds  the 
power  to  dictate  terms  of  life  and  conditions  under  which 
the  gentile  worker  may  do  his  work  of  supplementing 
the  operations  of  nature  and  producing  needed  value  to 
obtain  his  livelihood.    The  proprietorship  also  of  the  value 

94 


EVALUATION  OF  CAPITAL  AND  RATING  OF  PROFIT  95 

so  to  be  produced  by  the  gentile  worker  has  an  attraction 
for  the  morgan,  equal  to  the  proprietorship  of  the  resources 
of  nature  themselves  which  he  already  has.  So  he  exer- 
cises the  power  he  has  and  asserts  ownership  of  all  value 
added  to  "his"  things  by  labor.  The  morgan  is  quite  prone 
to  take  and  devour  all  the  value  so  produced.  But  to  do 
so  would  stop  any  more  value  from  coming  into  being, 
and  that  would  be  a  calamity. 

The  gentile  of  the  first  order  is  the  goose  that  lays 
the  golden  eggs,  and  that  operation  could  not  continue 
unless  allowance  be  made  to  keep  the  goose  alive  and  in 
laying  condition.  So  the  worker  must  receive  the  mini- 
mum necessary  for  him  to  live  according  to  his  station 
in  life,  to  replenish  his  labor  power  and  continue  his 
species.  The  morgan  therefore  allows  the  worker  the 
minimum.  But  he  allows  it  grudgingly.  As  a  logical 
result  and  consequence  of  his  proprietorship  of  every- 
thing that  was  in  existence  before  production,  the  mor- 
gan in  his  own  eyes  is,  and  of  right  ought  to  be,  the  sole 
proprietor  of  all  that  follows.  He  instinctively  feels  that 
not  a  single  atom  has  been  added  to  what  was  already 
his,  either  actually  or  potentially.  It  never  dawns  upon 
him  that  the  bringing  and  carrying  of  "his"  matter  by 
the  working  gentile,  the  bringing  about  of  new  combina- 
tions and  forms,  creates  the  value  and  is  all  that  there 
is  of  real  value.  All  this  value  is  from  the  economic 
position  and  viewpoint  of  the  morgan,  merely  incidental 
and  secondary  to  what  he  regards  as  the  real  thing,  the 
atoms  that  constituted  and  continue  to  constitute  "his 
property."  Therefore  he,  quite  naturally,  regards  him- 
self as  the  lord  and  overmaster  of  this  value  also  created 
by  labor  and  imparted  to  existing  matter.  I  Tc  cannot 
but  think  it  a  shameful  and  unpardonable  mistake  of  na- 
ture that  she  made  the  gentile  with  insides  that  have  to 
be  filled  some  three  times  a  day  to  keep  the  worker  in 


96  WHY  THE  CAPITALIST? 

working  order,  and  gave  to  him  other  needs  that  have 
to  be  supplied.  The  morgan's  interests  cannot  reconcile 
themselves  to  nature's  caprice  that  compels  a  compro- 
mise with  the  needs  of  the  gentile's  life.  So  if  we  con- 
cede the  morgan's  proprietorship,  we  must  also  concede 
that  it  is  quite  proper  and  reasonable  that  the  morgan  as- 
sert the  right  to  determine  the  measure  of  the  minimum ; 
we  must  concede  to  him  the  right  to  satisfy  himself  that 
the  worker  is  honestly  and  in  good  faith  living  upon  the 
very  least  that  the  worker  can  get  along  with ;  we  must 
concede  that  any  longing  on  the  part  of  the  worker  for 
a  larger  part  of  the  value  he  creates  brands  him  at  once 
as  a  dishonest  man  at  heart,  and  a  rebel  in  spirit  against 
the  existing  order ;  and  we  must  also  concede  to  the  mor- 
gan the  right  to  educate  the  worker,  and  tell  the  worker 
how  and  when  and  where  he  might  cut  down  his  living 
expenses,  and  how  he  should  get  away  from  high  liv- 
ing "and  the  cost  of  high  living."  If  the  morgan  owns 
everything,  why  then  he  is  paying  the  fiddler  and  should 
have  the  right  to  choose  the  tune.  Every  man  naturally 
feels  that  he  should  have  the  right  to  control  and  guide 
the  things  he  is  paying  for. 

Now  the  worker  is  in  this  respect  often  "quite  un- 
reasonable." He  is  often  influenced  by  the  middle  of 
his  insides,  and  such  absurdities.  He  does  not  always 
let  his  head,  stuffed  with  morgan-serving  ideals,  com- 
mandments and  creeds,  control  his  conduct.  He  often 
lets  his  feelings  run  away  with  his  mind  and  when  he 
does,  he  gets  to  be  quite  extreme  in  his  unreasonable- 
ness. He  presumes  to  have  a  word  to  say  as  to  what 
the  minimum  of  his  allowance  shall  be.  The  morgan, 
of  course,  regards  this  as  the  maximum  of  audacity. 
Controversy  ensues.  The  morgan,  in  the  full  conscious- 
ness of  his  property  rights  and  overlordship,  refuses  as 
a  matter    of    principle  to    concede  any    right  to  the  pre- 


EVALUATION  OF  CAPITAL  AND  RATING  OF  PROFIT  97 

sumptious  and  arrogant  gentile  to  interfere  with  his 
property  rights.  The  gentile  pleads  and  offers  to  arbi- 
trate. But  the  morgan,  strong  in  the  justice  of  his 
superiority  secured  to  him  by  church  and  state,  "has 
nothing  to  arbitrate." 

If  we  concede  the  morgan's  proprietorship,  then  we 
must  condemn  the  worker  as  an  unreasonable  disturber 
of  the  natural  order  whenever  he  asks  that  the  minimum 
be  readjusted.  Every  time  the  worker  demands  the 
right  to  have  a  voice  in  the  adjustment  of  the  amount 
of  the  minimum  that  he  shall  receive,  he  is  making  a 
treasonable  attack  upon  the  morgan's  sacred  right  of 
property.  This  is  sedition,  and  sedition  must  be  suppressed. 
The  gentiles,  however,  greatly  outnumber  the  morgans. 
Therefore,  to  hold  sedition  down,  it  is  of  the  highest  diplo- 
matic importance  that  a  great  show  of  right  and  justice  on 
the  side  of  the  morgan  be  maintained.  "The  strongest  is 
not  strong  enough  to  continue  always  master,  unless  he 
transforms  his  power  into  a  right,  and  obedience  into  a 
duty."  To  remember  this  makes  it  easier  to  perpetuate  the 
proprietorship.  The  morgan's  intellectual  police  are  there- 
fore brought  into  full  requisition.  It  is  their  work  here 
also  to  befuddle  the  gentile  minds.  So  they  give  an  ar- 
bitrary money  term  valuation  to  the  proprietorship,  and 
then  preach  and  teach  the  right  to  continue  taking  interest 
and  profit  upon  the  basis  of  this  valuation.  Their  exer- 
citation  attaches  an  arbitrary  money  valuation  to  everything 
seizable  in  heaven,  on  earth  and  beneath  the  earth. 

So  long  as  the  gentiles  can  be  clubbed  away  from  or  out 
of  a  free  and  independent  use  and  enjoyment  of  anything, 
it  is  enough  to  make  that  thing  go  by  the  name  of  capital. 
Everything  the  proprietorship  of  which  can  be  used  to 
wring  out  profits,  is  appropriated  and  given  the  name  of 
"capital"  as  well  as  an  arbitrary  valuation  in  terms  of 
money.    Then  because  it  has  this  tag  of  money  valuation 


98  WHY  THE  CAPITALIST? 

affixed,  it  must  in  morgan  justice  and  fairness  be  unham- 
pered and  unmolested  in  its  right  to  continue  taking  profits 
for  the  further  gratification  of  the  morgan's  greed.  It  is 
called  "wealth."  At  one  time  cattle  gave  the  name  to 
wealth.  A  morgan's  wealth  was  evaluated  in  heads — 
capita — of  cattle.  Thus  we  have  the  arbitrary  name  "cap- 
ital" given  to  everything  on  which,  and  with  which  labor 
power  can  be  expended  in  producing  value ;  and  everything 
seizable  and  without  which  the  gentile  cannot  live. 

All  of  the  actual  value  resulting  from  the  expenditure  of 
labor  power  by  the  gentile  therefore  belongs  to  the  morgan 
as  a  matter  of  course.  He  owned  all  the  material  in  the 
first  place  and  the  value  created  by  labor  could  not  be 
lodged  anywhere  else  than  in  that  material.  The  gentile's 
working  efforts  have  to  be  exerted  upon  something,  other- 
wise they  will  be  only  grotesque  gesticulations.  It  follows 
that  as  it  was  in  the  beginning,  so  it  is  now,  and  so  it  will 
be  to-morrow,  under  morgan  rule.    The  morgan  owns  all. 

Eternal  vigilance  is  the  price  of  the  morgan's  pro- 
prietorship, also  of  the  subsequently  created  value.  As  the 
arrangement  does  not  always  set  well  on  the  gentile's  neck, 
the  mind  of  the  gentile  must  be  kept  away  from  thoughts 
and  suggestions  that  are  dangerous  to  the  profit  idea  result- 
ing from  proprietorship,  and  his  heart  must  be  kept  free 
from  covetousness  as  to  these  profits.  So  the  morgan's  in- 
tellectual outfit  here  too  gives  a  reassuring  and  virtuous 
sounding  name  to  the  resulting  surplus  value  that  the  mor- 
gan riots  in. 

When  a  thing  gets  a  virtuous  sounding  name  the  thing 
is  morgan  right,  for  a  time  at  least.  Surplus  value  is  said 
to  be  the  compensation  of  capital  and  it  is  called  "profit" — 
"legitimate  profit."  It  is  legitimate  because  it  is  baptized, 
recognized  and  legalized  by  the  morgan's  ever-servient 
church  and  state.  So  there  we  have  it,  Capital  and  Profit ! 
These  are  the  two  pillars  of  the  morgan's  system  of  so- 


EVALUATION  OF  CAPITAL  AND  RATING  OF  PROFIT  99 

ciety,  carrying  between  them  the  straight  and  taut  cable 
line  of  morgan  reason.  This  cable  line  by  thong  and  ring 
holds  in  leash  all  the  sage  wisdom  within  reach  of  the  mor- 
gan and  his  intellectual  servitors.  This  wisdom,  leashed  to 
the  ring  on  the  line,  imagines  itself  free,  poor  thing,  be- 
cause like  a  spaniel  it  may  disport  itself  running  back  and 
forth  between  the  seemingly  great  and  imposing  pillars  of 
Capital  and  Profit,  taking  its  exercise  and  displaying  its 
agility  under  the  admiring  gaze  of  the  sometimes  to  it 
generous  morgan. 

According  to  spaniel  logic,  nothing  in  all  creation  is  log- 
ical or  worthy  of  the  least  study  or  consideration  that  does 
not  come  within  reach  of  the  spaniel  tied  to  the  line  be- 
tween the  post  of  capital  and  the  post  of  profit.  Various 
names  are  used  for  these  stakes.  "Capital,"  "investment," 
"vested  interests,"  "income  producing  property"  are  some 
of  the  names  given  to  the  one.  "Interest,"  "profit,"  "re- 
turns," "compensation,"  "income,"  are  some  names  given  to 
the  other.  But  it  is  all  the  same.  The  names,  like  the 
whole  scheme  of  logic  in  support  of  the  theory  of  capital 
and  profit,  are  calculated  only  to  becloud  the  issue. 

The  argument  to  support  the  theory  of  profit-taking  is 
based  upon  the  claim  of  compensation  for  the  capital  "en- 
tering into  and  used  in  production,"  measured  by  the 
claimed  "amount  and  value"  of  the  capital.  The  amount  of 
claimed  value  of  this  "capital,"  whether  acquired  by  pur- 
chase or  accretion,  is  based  upon  the  volume  of  profit  that 
the  proprietorship  of  it  will  enable  the  proprietor  to  wring 
out  of  production.  Or  to  put  it  into  other  and  perhaps 
plainer  words:  The  more  profits  the  "capital"  will  ex- 
tract the  greater  "value"  it  has,  and  the  greater  the 
"value"  the  "capital"  has,  the  more  profits  the  owner  of 
it  is  justified  in  demanding.  The  whole  reasoning  of  the 
theory  of  "capital"  consists  in  begging  of  the  question. 
The  morgan  takes  more  profits  because  the  "valuation" 


100  WHY  THE  CAPITALIST? 

of  the  capital  is  greater;  and  the  "valuation"  of  the  cap- 
ital is  greater  because  the  morgan  can  take  more  profits 
by  means  of  it.    What  a  beautiful  circle ! 

The  amount  of  profits  extracted  is  always  justified  by 
the  amount  of  the  capital;  and  the  "value"  of  the  capi- 
tal is  always  justified  by  the  amount  of  profits — surplus 
value — that  it  pulls  out  or  is  expected  to  extract.  The 
morgan  logic  never  leaves  this  charmed  circle.  It  is. 
or  pretends  to  be,  utterly  unable  to  see,  hear  or  under- 
stand anything  beyond.  The  spaniel  does  occasionally 
"smell  a  rat."  Then  he  just  howls  and  furiously  runs 
along  his  restricted  course  from  capital  to  profit,  from 
profit  to  capital  back  and  forth,  again  and  again,  snarl- 
ing and  snapping  at  all  who  dissent  from  his  canine 
course  of  reasoning. 

A  large  amount  of  real  value,  consisting  of  the  unpaid 
for  value  created  by  labor,  enters  into  that  thing  called 
capital.  That  real  value  is  capable  of  being  admeasured 
and  its  true  basis  and  amount  ascertained  as  already 
pointed  out,  but  not  by  the  morgan  method.  A'nd  whilst 
that  value  furnishes  the  stock  argument  for  that  much 
ridden  term  "thrift,"  the  measure  of  it  does  not  in  the 
slightest  degree  enter  into  the  evaluation  of  "capital," 
or  the  rating  of  interest  or  profit,  within  the  reasoning 
and  special  justification  specially  manufactured  in  the 
morgan  colleges  for  gentile  consumption.  The  price  of 
the  capital  stock  of  any  company  is  always  determined  by 
the  amount  of  profits — surplus  value — that  the  company 
is  getting  out  of  the  gentile's  labor,  or  gives  promise  of 
getting.  That  is  the  basis  upon  which  one  morgan  sells 
it  to  another  morgan.  That  is  the  whole  basis  of  the 
evaluation.  If  the  land,  plant,  patent,  secret  or  outfit 
was  bought  at  a  cheap  price,  in  view  of  the  profits  ob- 
tainable, then  the  investment  was  good,  the  cheaper  the 
better.     If  very  cheap,  then  it  was  "splendid,"  and  you 


EVALUATION  OF  CAPITAL  AND  RATING  OF  PROFIT        101 

could  not  buy  it  for  anything  near  what  it  cost,  because 
it  is  worth  more,  it  has  more  morgan-value.  If  the  thing 
was  bought  at  a  dear  price  based  on  the  profits  ob- 
tainable, then  the  investment  was  a  bad  one,  and  if  no 
profits  at  all  are  obtainable  and  there  be  no  promise  of 
profit,  then  the  investment  was  a  complete  failure,  the 
stock  has  no  morgan-value,  you  cannot  sell  it  unless  you 
fool  some  one  into  buying  a  worthless  thing.  The  most 
costly  plant,  tools  and  machinery  that  cannot  be  utilized 
to  get  surplus  value  are  without  worth  and  valueless  in 
the  morgan's  world,  except  only  as  a  scrap  heap,  and 
the  land  will  likewise  sink  in  its  morgan-value  to  such 
a  price  as  will  be  commensurate  with  the  profits  that  it 
might  yield  in  some  other  enterprise. 

As  the  amount  of  surplus  value  produced  by  the  worker 
increases,  the  evaluation  of  the  "capital"  is  increased, 
and  much  faster,  at  that,  and  the  greater  extraction  of 
profits  justified.  A  splendid  illustration  of  this  is  given 
by  the  bulletin  of  the  Department  of  Commerce  and  La- 
bor at  Washington,  based  upon  a  compilation  of  the 
figures  relating  to  manufactures,  obtained  by  the  Bureau 
of  the  Census  for  the  period  between  1849  and  1909.  As 
the  amount  of  surplus  value  per  worker  increased,  the 
value  set  upon  the  capital  kept  on  increasing  as  follows: 

Surplus  Value  "Value"  of  Capital 

Year,  per  Worker.  per  Each  Worker 

1849 — $237.52  Factory,  hand  and  neighborhood  industries.  .$  557.13 
1859 —  362.51  Factory,  hand  and  neighborhood  industries..  770.15 
1869 —  377.14  Factory,  hand  and  neigbborhood  industries..  825.10 
1879 —  375.02  Factory,  hand  and  neighborhood  industries..  1,021.10 
1889 —  545.48  Factory,  band  and  neighborhood  industries..  1.534.75 
1899 —  628.63  Factory,  hand  and  ncigbborhood  industries..    1,849.52 

1899 —  598 .  95  Factory 1 ,904 .  49 

1904—  673.55  Factory 2,317.86 

1909 —  771 .30  Factory 2.785.96 

The  census  of  1910  also  shows  the  movement  in  per- 


102  WHY  THE  CAPITALIST? 

centages.  The  increase  in  the  amount  of  value  added 
to  material  by  manufacture  from  1849  to  1859  was  84.1 
per  cent  and  the  increase  in  "capital"  is  given  as  89.4 
per  cent.  From  1859  to  18G9  this  increase  in  value  added 
to  the  material  63.3  per  cent  and  the  increase  in  capi- 
tal 67.8  per  cent;  to  1879  these  figures  were  again  in-. 
creased  to  41.4  and  64.7;  to  1889  they  were  again  in- 
creased to  113.4  and  133.8;  to  1899  they  were  again  in- 
creased to  34.3  and  50.4;  to  1909  they  were  again  in- 
creased to  76.6  and  105.3. 

Thus  the  evaluation  of  the  power  to  wring  out  sur- 
plus values  is  always  expressed  in  figures  well  in  ad- 
vance of  the  figures  that  express  the  increased  value 
added  to  material  by  manufacture.  Thus  is  sustained  the 
"moral"  argument  of  a  "fair  return  for  the  capital  in- 
vested." It  is  just  the  same  as  the  evaluation  of  a  piece 
of  land.  It  keeps  rising  constantly  in  advance  of  and 
faster  than  the  advantage  to  draw  rent  increases. 

From  1849  to  1859  the  evaluation  of  capital,  so-called, 
was  increased  six  per  cent  more  than  the  value  added 
to  material  by  manufacture  increased ;  to  1869,  seven  per 
cent  more;  to  1879,  56  per  cent  more;  to  1889,  17  per 
cent  more;  to  1899,  47  per  cent  more;  to  1909,  37  per  cent 
more. 

It  is  true  that  the  number  of  establishments  increased 
also.  It  is  also  true  however  that  a  factory  is  constantly 
deteriorating  in  value,  because  the  value  is  constantly 
going  out,  as  we  have  seen,  into  the  product  of  the  fac- 
tory.   Of  this  the  census  gives  us  no  figures. 

Assume  for  the  purpose  of  further  illustration  that  a 
worker  produces  100  units  of  value  per  week  and  needs 
25  units  of  value  per  week  to  live  upon  and  work.  The 
morgan  allows  the  worker  the  25  units  he  needs  must 
have.  The  remaining  75  units  constitute  surplus  value. 
The  morgan  takes  this  and  calls  it  interest  or  profit  or 


EVALUATION  OF  CAPITAL  AND  RATING  OF  PROFIT        103 

compensation  for  the  so-called  service  rendered  by  his 
power  to  intercept  which  he  calls  capital.  Such  an  enter- 
prise, of  course,  is  a  "money  maker"  and  if  one  morgan 
wishes  to  buy  it  from  another  he  will  be  required  to  pay 
a  price  commensurate  with  the  "money  making"  power 
of  the  enterprise.  The  morgan  selling  it  will  charge  as 
high  a  price  as  he  can  get  and  in  the  morgan  sense  that 
is  and  will  be  the  value  or  amount  of  "capital"  in  it. 
If  15  per  cent  be  regarded  as  a  fair  return  or  compensa- 
tion then  the  "capital"  producing  75  units  of  surplus 
value  per  week  or  3900  units  per  annum  net,  will  be 
said  to  be  worth  26,000  units.  That  is  the  morgan- 
value  of  it.  If  the  surplus-producing  or  profit-bringing 
power  doubles,  then  the  morgan-value  or  amount  of 
the  "capital"  will  at  least  double  also.  It  will  be  said  to 
be  worth  52,000  units,  or  more.  If  the  surplus — or 
profit-making  power  decreases  or  passes  away  then  the 
morgan-value,  or  amount  of  "capital"  also  decreases  or 
passes  away.  The  plant  becomes  junk  when  it  produces 
no  more  profit. 

By  increasing  the  morgan-value  of  the  "capital"  com- 
mensurate with  the  profit-begetting  property  of  the  en- 
terprise, the  profit  or  compensation  for  the  "use"  of  the 
"capital"  is  always  kept  upon  what  in  morgan  morals 
and  ethics  is  called  a  "fair  basis."  It  is  like  the  politician's 
trick  of  keeping  tax  rates  down  by  raising  the  valuation. 
But  this  game  of  the  politician  is  puny  in  comparison. 


CHAPTER  X. 

EXPLOITATION. 

All  of  the  ramifications  of  the  morgan  as  an  ex- 
ploiter are  merely  ramifications,  never  varying  a  par- 
ticle in  principle.  The  prime  object  and  purpose  of  all 
his  "brain  work"  has  always  been  to  exact  rent  and  interest 
from  all  the  gentiles,  and  to  abstract  the  surplus  produced  by 
the  gentile  of  the  first  order,  the  worker.  During  the  early 
ages  of  the  morgan's  civilization  this  surplus  was  small,  com- 
paratively. The  chattel  slave  and  the  serf  could  not  produce 
so  much  over  their  keep  as  the  modern  "hand"  producers. 
Therefore  in  the  days  of  chattel  slavery  and  feudalism  there 
was  not  so  great  an  accumulation  of  the  surplus  value. 

As  we  look  back  chattel  slavery  and  feudalism  appear 
to  us  in  all  their  bald  hideousness  because  to  us  there 
was  no  adulteration  and  no  sham  palliation  of  the  brutal 
proprietorship  of  men  and  lands,  and  with  it  proprietor- 
ship of  the  results  of  industry.  The  morgans  of  those 
days  are  not  and  cannot  now  be  paraded  before  us 
decked  with  false  feathers.  They  are  not  held  up  to  us 
of  a  later  age  as  men  of  industry,  thrift,  superior  intelli- 
gence or  frugality,  holding  their  fortunes  by  virtue  of 
hard  work  and  strict  attention  to  business. 

The  morgans  of  old  did  not  pretend  to  be  workers  by 
falsely  calling  themselves  farmers  or  manufacturers  or 
builders  whilst  they  were  only  jugglers  of  natural  re- 
sources and  surplus  values.  Their  pride  of  birth  and 
social  position  did  not  permit  of  their  parading  as  farm- 
ers or  manufacturers.  That  to  their  mind  was  degrad- 
ing. Though  my  process  of  reasoning  is  far  different 
from  theirs,  I  arrive  at  the  same  conclusion.     It  was 

104 


EXPLOITATION  105 

degrading.  I  cannot  imagine  anything  more  degrading 
than  a  false  pretence  that  merely  covers  up  spoliation. 
The  modern  industrial  morgans  are  like  many  rich  and 
therefore  "respectable"  ladies  that  have  china  painting 
done  by  artists  whilst  they  themselves  sit  by  and  chat- 
ter, then  brazenly  have  their  names  burned  into  the  work 
and  hand  it  out  to  the  uninitiated  as  the  production  of 
their  own  "wonderful"  talent. 

The  morgan  in  industry  produces  absolutely  nothing. 
If  a  man  gives  his  personal  attention  and  service  in  some 
way  to  his  own  business  so  as  to  contribute  by  that  per- 
sonal attention  and  service  to  the  value  produced  by  hu- 
man labor,  then  only,  and  to  that  extent  only,  is  he  not 
a  morgan  but  a  gentile.  And  he  is  entitled  to  the  full 
amount  of  the  value  that  he  produces.  But  to  the  extent 
that  he  draws  profits  to  himself,  he  is  a  morgan. 

The  morgan  to  the  extent  that  he  is  a  morgan  loafs 
around,  talks  big,  looks  wise,  puts  his  name  or  mark 
upon  the  value  that  the  gentile  produces  and  bags  the 
surplus  value,  calling  it  interest,  profits  or  compensation. 
His  bag  has  grown  enormously  large.  We  shall  now 
trace  the  progress  of  that  growth. 

At  the  inception  of  the  morgan's  reign  the  surplus  of 
values  was  small,  comparatively,  because  the  chattel 
slave  and  the  serf  could  not  produce  so  much  over  their 
keeping  and  there  was  not  so  great  an  accumulation  of 
man-wrought  wealth  as  now.  The  handcraftsman  de- 
veloped rapidly  with  the  abolition  of  feudalism  and  chat- 
tel slavery.  The  handicraftsman  was  to  an  extent  the 
proud  owner  of  his  own  skill  and  besides  that  owned  the 
tools  that  he  worked  with.  He  produced  somewhat 
more  of  value  than  did  the  chattel  slave  or  serf.  There 
was  very  little  of  the  morgan's  "capital"  that  was  or 
could  be  expressed  in  value.  The  morgan  owned  the 
land  and  thereby  the  raw  material  and  the  hut  that  the 


106  WHY  THE  CAPITALIST? 

handicraftsman  lived  in.  For  this  the  handicraftsman 
paid  tribute  out  of  the  value  that  his  labor  produced. 
Outside  of  the  comparatively  small  revenue  that  went 
to  the  morgan  landlord,  either  in  kind,  in  labor  or  in 
money,  the  gentile  retained  what  he  produced,  simply 
because  there  was  not  enough  of  it  for  the  morgan  to 
take  as  exploiter  without  starving  out  the  handicrafts- 
man and  so  losing  even  that  which  he  was  yielding,  or 
driving  him  into  rebellion. 

In  time  there  appeared  in  embryo,  the  exploiter  of  the 
worker,  the  taker  of  surplus  value.  In  course  of  time  the 
exploiters  who  survived  the  destructive  war  of  sinuous 
competition  grew  into  the  morgan  type  of  exploiters. 
At  first  there  apeared  the  master  handicraftsman,  em- 
ploying a  number  of  journeymen  handicraftsmen.  By 
exploiting  them  he  "made"  little  more  than  compensa- 
tion for  assembling  raw  material  and  marketing  product. 
The  master  would  get  a  profit  consisting  of  say  twenty 
per  cent  of  the  value  produced  by  a  small  number  of  men. 
There  is  no  data  available  as  to  the  true  amount  and 
these  figures  are  given  merely  as  a  starting  point  and 
to  show  the  process  rather  than  the  proportion. 

The  master  handicraftsman  had  to  and  did  work  along 
himself  and  in  that  way  got  his  livelihood.  Then  came 
the  development  of  the  master  handicrafstman  into  the 
manufacturer  along  with  the  development  of  the  group- 
ing of  hand-workers,  or  manufacturing  method.  This 
method  consisted  of  the  co-operation  of  a  number  of 
workers  to  produce  given  results.  The  work  was  divided 
and  sub-divided,  each  worker  becoming  more  efficient 
in  performing  certain  parts  of  the  work  of  production. 
The  less  skillful  parts  of  the  work  were  performed,  and 
performed  just  as  well,  by  the  less  skillful  hands  of  those 
whose  station  in  life  demanded  for  them  less  to  live 
upon  that  the  more  skillful.     It  opened  more  and  more 


EXPLOITATION  107 

opportunities  for  utilizing  the  labor  of  women  and  chil- 
dren. Thus  the  volume  of  output  per  worker  was  en- 
hanced without  enhancing  the  amount  the  worker  re- 
ceived of  the  value  he  produced.  It  merely  increased 
the  surplus  of  value  for  the  master,  now  developing  along 
toward  morgan  dimensions. 

The  next  stage  of  industrial  development  following  the 
manufactory  stage  was  the  mill  or  machine-factory  stage 
under  which  we  are  now  living.  The  introduction  of 
labor-saving  machinery  and  large  organization  of  indus- 
try worked  a  most  complete  and  marvelous  revolution 
in  the  method  of  applying  human  labor  to  the  production 
of  value,  and  enormously  increased  still  further  the 
productivity  of  human  labor,  and  requisitioned  more 
and  ever  more  of  the  women  and  children  to  serve  in 
the  growing  and  wearying  drudge  of  productive  factory 
work.  The  highly  skilled  mechanic  now  disappears.  The 
cunning  of  the  craftsman's  hand  becomes  a  drug  upon  the 
market.  It  is  rendered  superfluous  by  machinery  and 
improved  methods.  The  machine  tender  is  ushered  in 
to  wear  his  life  away,  watching  and  directing  tools  now 
clutched  in  the  untiring  grip  of  power  driven  machinery. 
The  machine  tender  himself  becomes  as  it  were  a  part  of 
the  machine.  Special  skill  and  good  muscle  are  displaced 
by  lathe  and  jenny,  and  a  thousand  other  contrivances 
equipped  with  belt,  pulley  and  motor,  attended  by  stunted 
men  and  emaciated  women  and  children.  The  so-called 
blessings  of  civilization  are  not  for  these  children  of  the 
race.  On  the  contrary,  all  of  these  expropriated  gentiles 
are  permitted  to  be  upon  the  earth  only  to  be  exploited 
by  the  morgan,  now  also  in  the  guise  of  manufacturer, 
mine  operator,  etc.,  etc.,  "employing  labor,"  and  so  to 
advance  the  morgan's  blessed  civilization  for  the  glory 
of  the  morgan. 

This  is  the  course  of  all  productive  industry,  whether 


108  WHY  THE  CAPITALIST  ? 

in  the  factory,  in  the  mine,  on  the  farm,  or  elsewhere. 
Everywhere  the  press  and  drive  is  toward  production  on 
a  large  scale,  crushing-  out  the  smaller  master  handi- 
craftsman or  manufacturer  by  improved  methods  and 
greater  scope  and  power.  There  is  no  longer  any  hum 
of  industry.  All  is  soot  and  smoke  and  glare,  screach 
and  clatter,  producing  a  deafening  roar  and  rush  of  wealth 
to  the  bursting  stores  of  the  morgan. 

Under  the  earlier  forms  of  exploitation  the  amassing 
of  wealth  was  comparatively  slow.  The  reasons  were 
quite  natural.  Human  productive  efficiency  was  low  in 
comparison  to  what  it  became  in  later  times  and  the 
early  tools  of  production  were  simpler.  Then  the  life 
of  the  average  individual  counted  for  more  in  production. 
The  handicraftsman  in  importance  was  above  the  tools 
and  owned  the  tools  that  he  worked  with.  He  received 
a  larger  share  or  proportion  of  the  value  that  he  pro- 
duced. Or,  to  put  it  in  another  way,  he  did  not  produce 
so  much  more  than  he  needed  to  live.  If  the  developing 
morgan  exploiter  pressed  down  a  little  too  hard  upon 
him  or  if  he  felt  it  irksome  to  be  under  any  pressure  at 
all,  it  did  not  require  so  great  an  effort  to  start  in  busi- 
ness for  himself  and  in  a  little  while  perhaps  become  an 
embryo  exploiting  morgan. 

The  early  exploiter  was  not  wholly  exploiting.  He 
was  part  worker.  If  he  had  ten  workers  under  him  the 
aggregate  of  the  surplus  from  their  labor  was  not  suf- 
ficient to  support  him  in  idle  luxuriousness.  If  the  ex- 
ploiter got  from  ten  workers  as  much  as  one-fifth  of  the 
value  they  produced,  each  one  producing  100  units  of 
value  per  week,  it  would  give  him  in  the  aggregate  an 
amount  equal  to  that  produced  by  two  workers,  say 
200  units  of  value  per  week. 

Though  the  exploiter  was  frugal  and  could  live  com- 
fortably for  his  time  on  this  booty,  he  was  not  and  could 


EXPLOITATION  109 

not  be  satisfied.  His  cupidity  did'  not  permit  of  it,  and 
without  cupidity  he  could  not  have  been  an  exploiter. 
So  he  worked  also  and  by  his  work  produced  as  much 
value  as  he  needed  for  his  keep.  The  200  units  surplus 
per  week  that  he  "made"  on  his  workmen  accumulated. 
In  a  year  of  say  52  productive  weeks,  the  exploiter  had 
a  snug  10,400  units  of  surplus  value.  His  workers  had 
nothing  of  the  surplus  value  they  had  created.  What 
if  some  of  them  did  draw  heavier  on  their  health  and 
strength  and  pinched  from  their  lives  a  little  accumula- 
tion of  value  units?  That  did  not  give  them  and  does 
not  now  give  to  any  of  those  who  try  it  any  of  the  sur- 
plus they  created  or  now  create.  It  does  not  get  them 
into  the  game  of  profit  filching.  Those  who  get  into  the 
game  from  time  to  time  get  in  by  reason  of  their  craft 
and  daring,  called  "business  ability."  Their  little  savings 
only  supply  the  jimmy.  Fully  many  more  get  the  jimmy 
itself  by  exercise  of  that  self  same  craft  and  daring. 

How  stupid  to  starve  and  pinch  to  get  the  jimmy, 
when,  if  you  have  the  "talent"  for  putting  up  a  strong 
front,  winning  confidence,  borrowing  on  your  own  face 
and  note,  kiting,  flimflamming  and  sharp  turning,  you 
can  get  your  jimmy  in  a  much  more  genteel  way!  It 
furnishes  a  most  wonderful  stimulus,  besides,  to  the  self 
assurance  and  brass  called  business  enterprise.  That 
self  assurance  and  brass  is  worth  even  more  than  the 
jimmy.  It  is  worth  more  than  gold.  The  ordinary 
clod-hopper  cannot  see  or  understand  it,  for  it  is  under 
a  cloak,  and  he  is  so  impressed  that  he  regards  the 
"talented  gentlemen"  almost  as  a  god.  This  is  worth 
much  more  than  the  jimmy  itself  to  the  man  that  has  it. 
The  morgan's  intellectual  outfit  point  to  the  brilliant 
examples  and  preach  at  all  the  gentile  mass  to  go  and 
do  likewise,  and  shout  that  all  will  win  success  if  they 
only  try  hard  enough.    They  do  not  attempt  to  tell  us 


110  WHY  THE  CAPITALIST? 

who  will  be  the  workers  if  all  should  succeed  in  becom- 
ing exploiters,  nor  do  they  expect  us  to  reflect  upon  the 
conditions  of  life  possible  in  a  society  such  as  their  ideal 
of  business  suggests.  Wouldn't  it  be  fine  to  live  in  a 
community  where  everybody  got  his  livelihood  by  the 
complaisant  pursuit  of  burglary?  What  possible  dif- 
ference can  there  be  between  burglarizing  one  another's 
houses  for  one  another's  goods,  and  exploiting  one  an- 
other for  one  another's  goods  ? 

If  the  implication  of  turpitude  is  confusing  or  disturb- 
ing, let  us  take  a  perfectly  moral  illustration.  How 
beautiful  it  would  be  if  we  all  would  make  our  liveli- 
hood by  taking  in  washing  from  one  another,  or  if  we  all 
got  our  living  in  Jerusalem  by  peddling  matches  to  each 
other.  According  to  the  sophistry  of  the  morgan's  school 
if  everybody  in  a  foot  race  would  only  run  fast  enough, 
everybody  would  win  the  big  stake. 

The  self-complaisant  intellectuals  of  the  morgan's  out- 
fit, when  thus  smoked  out  say  that  all  men  are  not  alike 
nor  equally  endowed,  that  only  the  few  best  and  fittest 
can  win,  and  that  the  many  must  fail.  Then  they  have 
the  brazenness  to  assert  that  their  successful  jimmy  men 
are  the  few  best  and  fittest,  the  upper  classes,  the  most 
competent,  and  that  they  ought  to  have,  as  they  do,  the 
cream  and  fine  bread,  and  that  the  great  mass  of  human 
kind  who  have  no  predilection  for  jimmy  work  are  the 
inferior,  the  lower  classes,  that  have  to  be,  and  of  right 
ought  to  be,  content  to  live  on  a  short  allowance  of  in- 
ferior skim  milk  and  husks.  They  exalt  and  extol  the 
meanest  and  degrade  and  stigmatize  the  noblest  of  the 
human  race.  They  prate  wisely  of  the  inexorable  law 
that  decrees  the  survival  of  the  fittest,  assuming  that 
that  society  is  the  best  where  bestial  characters  are  best 
developed  and  prove  the  fittest.  Their  opposition  to  any 
change  of  this  form  of  society  is  based  principally  on 


EXPLOITATION  111 

the  very  claim  that  this  is  the  best  sort  of  society  to  de- 
velop the  character  that  is  most  fit  to  survive  in  it. 

It  would  be  as  legitimate  an  argument  to  say  that 
putrid  carrion  is  the  best  sort  of  place  to  develop  the 
maggot  and  that,  ergo,  the  maggot  is  the  fittest  creature 
in  that  sort  of  an  environment,  because  he  survives. 
Therefore,  in  the  name  of  all  that  is  holy,  do  not  remove 
the  carrion,  do  not  abolish  the  conditions  that  produce 
the  creature  most  fit  to  survive  under  those  conditions, 
no  matter  how  vile  the  creature  or  how  vile  the  condi- 
tions. 

The  more  the  exploiting  appetite  is  fed,  the  more  rave- 
nous it  grows.  When  the  little  morgan  exploiter  be- 
holds his  accumulation  of  10,400  units  of  surplus  value 
accumulated  from  the  workers  in  one  year,  he  looks 
about  for  opportunities  to  expand.  He  will  get  20,  or  30, 
or  40  workers,  accept  and  apply  suggestions  for  re-ar- 
ranging and  reorganizing  the  methods  of  production, 
all  with  the  one  sacred  purpose  of  increasing  the  amount 
of  surplus  value  produced  in  gross  and  per  capita.  New 
schemes,  devices  and  machines,  the  product  of  gentile 
minds,  as  fast  as  proved  of  advantage  to  the  morgan,  arc 
accepted  and  introduced,  further  and  further  increasing 
the  output  of  surplus  value.  So  the  machine,  which  is 
simply  a  development  of  tools  and  methods,  brings  in 
the  factory  and  factory  methods  of  production.  It  is  of 
no  difference  whether  the  machine  is  operated  within  a 
large  building,  or  in  a  large  mine,  or  on  a  large  farm. 
It  all  constitutes  the  factory  method  of  production.  This 
means  a  much  larger  amount  produced  per  person  em- 
ployed. 

The  Appeal  to  Reason's  Arsenal  of  Facts  for  1912,  by 
Fred  D.  Warren  says  on  page  GG : 

"The  following  tabic  is  compiled  from  the  13th  Annual   Labor 
Report,  which  oresents  in  detail  the  results  of  an  investigation  by 


112  WHY  THE  CAPITALIST? 

the  United  States  Labor  Commissioner,  showing  the  difference  in 
the  time  required  to  produce  a  certain  number  of  units  of  man- 
ufacture by  the  hand  process  and  by  the  machine  process.  The 
report  is  out  of  print.  This  table  is  valuable  and  should  be  pre- 
served. With  it  you  can  discover  at  a  glance  the  difference  in 
the  two  methods,  and  you  will  begin  to  understand  why  the  owners 
of  the  machines  wax  rich  while  the  worker  struggles  to  live.  For 
instance,  under  the  old  hand  method  it  required  118  hours  to  make 
one  landslide  plow.  Today,  with  modern  machinery,  it  requires 
less  than  four  hours.  The  worker  to-day  produces  30  plows  in 
the  same  length  of  time  it  formerly  required  to  make  one  plow. 
If  he  worked  in  the  good  old  days  for  $1  per  day,  it  cost  his  boss 
about  $11  in  wages.  To-day  he  gets  $2  per  day  and  in  eleven  days 
gets  $22  in  wages.  For  this  outlay  on  the  part  of  the  capitalist 
he  gets  30  plows.  In  other  words,  the  capitalist  doubles  the  wage 
fund  and  increases  his  wealth  30  times — or,  assuming  that  plows 
have  decreased  one-half  in  price,  he  still  has  wealth  15  times  greater 
than  did  his  predecessor.  The  laborer  gets  for  his  $2  to-day  just 
what  his  father  got  for  $1 — 'his  board  and  keep.'  Go  down  the  list 
and  you  will  grasp  the  signifiance  of  the  figures  and  will  know  the 
secret  of  capitalist  accummulation : 

— Hours — 
Hand       Machine 
Method.     Method. 

Pitchforks — 50   pitchforks,    12-inch   tines    200  12 

Plows — 1   landslide  plow,  oak  beams  and  handles..     118  3 

Bags — 5,000   cotton    flour    sacks    137  28 

Bookbinding — 500    12    mo.    books,    32     pages,     full 

cloth    228  59 

Shoes — 10  pairs   men's  fine   grade,   calf,   welt,   lace 

shoes,  single  soles,  soft  box  toes 222  29 

Boxes — 1,000  strawboard,  paper-covered  shoe  boxes, 

11^x6x3^    in 228  34 

Crackers — 1,000  lbs.  graham  crackers,  packed 160  35 

Carpet — 200  yards  ingrain  carpet,  cotton  warp,  wool 

filling,  1,088  ends,  26  picks  per  inch  151  64 

Carriage — 1  eliptic  spring,  leather  top  buggy,  piano 
body,  dropped  axles,  banded  hubs,  cloth  trim- 
mings         200  39 

Watch  cases — 10  gold  hunting  watch  cases,  18  size, 

engine  turned,  "Barleycorn  shield"  pattern 174  35 

Watch  movements — 1  key-wind,  brass  hunting  watch 

movement,  18  size,  full  plate  195  5 


EXPLOITATION  113 

— Hours — 

Hand  Machine 

Method.  Method. 
Combs — i  gross  horn  dressing  combs,  7x1%  inches, 

coarse  and  fine,  teeth  1  %  inches 66  12 

Barrels — 100  flour  barrels,  patent  hoops So  22 

Rope — 300  pounds  ^-inch  hemp  baling  rope 134  17 

Corsets — 1  dozen  medium  sateen  corsets,  17  eyelets 

in  back    210  18 

Hatchets — 12    dozen    No.    2    shingling   hatchets,    22 

pounds  per  dozen   191  54 

Firearms — 1    double-barreled,    breech-loading,    ham- 

merless    shotgun    202  58 

Pamphlets — Printing  and  binding  4,000  pamphlets,  32 

pages,  33A^53A  inches  234  5 

Newspapers — Printing  and  folding  36,000  pages 216  I 

Lithography — Printing  1,000  sheets  art  work,  19x28 

inches,  6  colors  281  5 

Typesetting — 100,000  ems,  newspaper  work 209  45 

Envelopes — 50,000  No.  6^4  plain  white  envelopes...  217  15 

Butter — 500  pounds,  in  tubs  125  12 

Shirts — 1    dozen   white   muslin    shirts,    plaited   linen 

bosoms,  linen-covered  collars  and  cuffs  attached  119  15 
Lounges — 12   oak   frame,   round   end,   plush-covered 

lounges,  69x23  inches,  antique  finish 246  46 

Harness — 1    set    double    coach    harness,    traces,    10 

stitches  per  inch  234  40 

AGRICULTURE. 

Barley — 100  bushels    21 1  9 

Corn — 50  bushels,  shelled,  stalks,  husks  and  blades 

cut  into  fodder  228  34 

Corn — 50  bushels,  husked,  stalks  left  in  field 48  18 

Cotton — Seed  cotton,  1,000  pounds   223  78 

Hay — Harvesting  and  baling  8  tons  timothy 284  92 

Oats — 100  bushels    265  28 

Potatoes — 500  bushels    247  86 

Rice — 10,000  pounds  rough 235  64 

Rye — 100  bushels   251  100 

Strawberries — 500  quarts  216  84 

Sweet  potatoes — 50  bushels  151  58 

Tomatoes — 100  bushels  216  89 

Wheat — 50  bushels 160  7 


114  WHY  THE  CAPITALIST? 

MINING. 

— Hours — 
Hand       Machine 
Method.     Method. 
Coal — 50  tons  bituminous  171  94 

TRANSPORTATION,     ETC. 

Loading    grain — Transferring    6,000    bushels    wheat 

from  storage  bins  or  elevators  to  vessels 222  53 

Loading  ore — Loading  100  tons  iron  ore  on  cars.  . . .     200  2 

Unloading  coal — Transferring  200  tons  from  canal 

boats  to  bins  400  feet  distant 240  20 

Unloading  cotton — Transferring  200  bales  from  ves- 
sel to  dock  240  75 


4,749  1,019 
According  to  this  comparison  the  factory  method  of 
production  is  about  4.6G  as  effective  in  the  number  of 
articles  produced.  But  this  by  no  means  states  all  of  the 
increase  of  efficiency  in  the  production  of  surplus  value. 
There  are  no  statistics  available  to  show  the  improved 
quality  of  the  articles  produced  by  reason  of  the  greater 
accuracy  of  the  machine. 

The  improved  factory  methods  have  wrought  changes 
equally  great  in  the  production  of  the  raw  material  of 
which  the  enumerated  articles  are  produced.  And  last, 
but  by  no  means  least,  the  schedule  does  not  give  us  the 
slightest  inkling  of  the  number  of  hours  of  labor  that 
have  been  transferred  from  better  paid  skilled  male  adult 
hands  to  cheaper  unskilled  male  hands,  or  to  the  still 
cheaper  hands  of  women  and  children.  All  of  these 
things  add  measurably  to  the  volume  of  surplus  value, 
and  surplus  value  is  what  the  morgan  exploiter  is  after, 
and  what  we  are  concerned  about  now. 

For  the  purpose  of  illustrating  the  workings  of  the 
morgan's  system  of  exploitation  I  instanced  that  under 
the  system  of  manufacture  before  the  advent  of  ma- 
chinery, the  exploiter  would  get  20  cut  of  every  100 
units  of  value  produced  by  the  worker,  the  worker  get- 


EXPLOITATION  115 

ting  only  as  much  as  he  needed  to  keep  him  at  work, 
namely,  80  units.  This  is  a  fair  basis  now  for  a  further 
consideration  of  the  effect  of  the  development  of  fac- 
tory methods  of  production  upon  the  relative  conditions 
of  the  morgan  exploiter  and  the  gentile  worker. 

The  increase  of  the  productiveness  of  the  gentile's 
work  is  much  more  than  4.66  times  100  units,  the  first 
amount  as  I  have  pointed  out,  but  I  shall  take  it  at  that 
figure.  So  each  worker  produces  466  units  of  value  per 
week.  Or  1000  workers  in  a  factory  would  produce 
466,000  units  of  value  per  week.  The  worker  still  gets 
no  more  per  week  than  enough  to  keep  him  working, 
namely,  80  units,  or  80,000  units  for  the  1000  workers. 
If  it  be  claimed  that  the  workers'  standing  has  raised  and 
therefore  he  must  receive  and  does  receive  an  advance 
according  to  his  raised  standard  of  life,  I  shall  for  the 
present  answer  that  it  is  very  evident  that  the  excess 
over  and  above  the  4.66-fold  increase  in  his  productive- 
ness of  value  much  more  than  offsets  any  such  claim. 
I  shall  also  show  in  a  later  chapter  that  this  claim  has 
absolutely  no  basis  in  fact ;  that  the  figures  furnished  by 
the  United  States  Department  of  Commerce  and  Labor 
show  that  he  gets  actually  less ;  that  the  apparent  im- 
provement in  his  condition  is  a  result  only  of  his  higher 
intelligence  which  enables  him  to  get  better  results  from 
a  smaller  allowance,  and  that  even  this  increased  intel- 
ligence is  exploited  by  the  morgan  for  more  profit  still. 

Therefore,  the  morgan  under  our  plan  of  reasoning 
gets  now  of  the  value  produced  by  the  worker  386  units 
to  every  80  units  that  the  worker  gets.  Thus  every 
3000  workers  produce  weekly  386,000  units  of  value  which 
they  do  not  get,  but  which  constitute  a  surplus  that  the 
morgan  abstracts  under  claim  of  ownership.  These 
figures,  of  course,  are  only  estimates  and  are  given  to 
show  the  system,  rather  than  the  exact  proportion. 


116  WHY  THE  CAPITALIST? 

The  morgan  is  unable  to  consume  any  more  than  a 
small  portion  of  the  appalling  accumulation  of  surplus 
values,  despite  his  devastating  appetite.  The  unused 
heap  of  value  grows  continuously  with  ever  accelerating 
rapidity,  and  the  great  problem,  and  the  only  problem 
that  can  enter  the  wealth-besotten  mind  of  the  morgan 
and  his  "intellectual  horde",  is  the  problem  of  how  to 
dispose  of  this  surplus  value  to  the  further  glory  of  the 
morgan ;  how  to  trade  it  off  so  as  to  gain  yet  more 
surplus  value  by  the  trade. 

Here  we  have  then  the  scramble  for  foreign  markets. 
The  surplus  value  that  the  gentile  worker  produces  and 
is  not  permitted  to  have,  the  morgan  of  each  country 
tries  to  ship  abroad  somewhere,  even  at  lower  prices, 
to  get  in  return  wines,  gems,  paintings,  statuary,  titles 
and  coronets,  or  to  acquire  abroad  still  more  of  the 
natural  resources,  mines,  railroads,  factories,  etc.  This 
makes  an  army  and  navy  necessary  to  "protect  our  inter- 
ests abroad  and  to  extend  our  trade." 

The  figures  taken  from  the  13th  census  of  the  United 
States,  Summary  of  Manufactures,  though  not  at  all 
sufficiently  illustrative,  is  indicative  of  the  constant  in- 
crease in  the  volume  of  surplus  acquired  by  the  morgan 
from  the  work  of  the  gentile  of  the  first  order.  The 
figures  given  are  of  factory  or  wholesale  prices,  relating 
only  to  the  juggle  of  the  morgan,  and  do  not  in  the 
slightest  degree  inform  us  of  the  purchasing  power  of 
the  workers'  wages  in  purchasing  as  he  must  from  the 
morgan  as  retail  merchant;  yet  here  are  the  figures:  In 
1899  there  was  added  by  the  workers  in  the  factory  to 
raw  material,  value,  stated  at  $4,831,076,000,  for  which 
the  wages  and  salaries  of  employes  amounted  to  $2,389,- 
132,000.  leaving  stated  surplus  at  factory,  $2,441,944,000. 
In  1904  the  amount  added  in  the  factory  to  the  raw  ma- 
terial, as  also  expressed  in  money,  was  $6,293,695,000,  for 


EXPLOITATION  117 

which  the  wages  and  salaries  of  employes  so  expressed 
amounted  to  $3,18-1,874,000,  leaving  surplus  at  factory- 
stated  at  $3,108,821,000.  In  1909  the  amount  added  in 
the  factory,  as  expressed  in  money  was  $8,530,261,000, 
for  which  the  wages  and  salaries  of  employes  so  ex- 
pressed amounted  to  $1,365,613,000,  leaving  surplus  at 
factory  stated  at  $4,161,618,000.  The  number  of  work- 
ers producing  this  wealth  in  1899  was  4,712,763,  in  1904 
they  were  5,468,383,  and  in  1909  they  were  6,615,046. 
This  was  not  much  if  any  over  one-fifth  of  the  persons 
engaged  in  or  who  were  available  for  productive  work. 

These  figures  do  not  by  any  means  fairly  represent 
either  the  amount  or  the  proportion  of  the  surplus  value 
filched  in  the  holy  name  of  profit.  They  are  the  factory 
figures  and  not  anything  near  the  retail  figures  at  which 
the  worker  gets  what  he  needs  from  the  morgan  whose 
other  face  appears  in  the  front  and  aspect  of  retail  mer- 
chant after  he,  the  morgan,  has  played  his  beating  part 
in  all  the  intermediate  stages.  All  of  the  filchings  of 
profit  and  percentages  of  these  intermediate  stages,  as 
well  as  of  factory  rent,  etc.,  are  only  the  carving  up  of 
the  surplus  value  and  an  apportioning  of  it  among  the 
divers  branches  or  departments  of  the  morgan's  profit 
abstracting  system.  It  is  merely  the  elaborate  book- 
keeping machinery  in  which  the  worker  as  such  has  no 
interest  and  by  which  he  is  not  in  the  slightest  degree 
effected,  any  more  than  that  he  is  befuddled  thereby. 
It  might  however  be  here  stated  that  the  true  aggregate 
amount  of  surplus  value  annually  filched  cannot  be  stated 
without  figures  showing  the  retail  price  in  the  aggregate. 
These  figures  are  not  available.  Our  statistical  system 
is  as  yet  too  imperfect. 

The  Summary  of  Manufactures  referred  to  says  that 
the  amount  of  value  produced  was  added  to  previously 
produced  value  of  raw  material  amounting  in   1899   to 


118  WHY  THE  CAPITALIST? 

$6,575,851,000,  in  1904  to  $8,500,208,000  and  in  1909  to 
$12,141,791,000.  The  value  in  this  raw  material  was  also 
the  product  of  human  labor,  and  all  of  it  had  in  the  same 
way  been  subject  to  the  same  abstraction  of  rent,  interest 
and  profit,  the  usual  method  of  abstracting  surplus  value. 

We  cannot  expect  to  measure  out  the  exploitation  go- 
ing on  in  the  morgan's  labyrinth,  and  put  it  down  in 
figures.  Sufficient  can  however  be  extracted  from  the 
tangled  mass  so  that  no  one  can  gainsay  that  it  is  mon- 
strous and  enormous. 

The  exploitation  by  means  of  the  railroads  in  1910, 
less  taxes,  amounted  to  $824,241,301.  On  June  14,  1912, 
the  national  banks  held  as  clear  accumulated  profit,  not 
paid  to  stockholders,  over  and  above  capital  and  deposits, 
$952,450,074.81,  and  the  state  banks,  $271,373,944.18. 

The  figures  given  from  our  national  reports  are  only 
examples.  The  wearisome  details  as  to  the  measurable 
extent  of  our  exploitation  expressed  in  money-terms  are 
beyond  the  purpose  of  this  work.  I  am  concerned  only 
with  an  examination  of  the  motives,  methods  and  prin- 
ciples that  drive  and  guide  the  morgan  ruler  and  owner 
of  the  earth  and  all  things  on  and  in  the  earth.  There 
are  many  volumes  of  statistics  and  reports  from  which 
the  dilligent  plodder  can  get  much  corroboration.  Suf- 
ficient be  it  here  to  say  that  the  morgan's  bag  of  surplus 
value  has  grown  to  appallingly  huge  proportions. 


CHAPTER  XI. 

EXPLOITATION     CONTINUED     IN     MERCHAN- 
DISING. 

The  merchant  presents  a  duality  of  character.  When 
the  merchant  renders  a  service  personally,  he  is  to  that 
extent  a  producer  of  value.  In  another,  and  more  im- 
portant aspect,  he  is  simply  a  continuation  of  the  mor- 
gan as  exploiter  and  profit  taker.  In  so  far  as  the  mer- 
chant and  his  wage  workers  distribute  or  facilitate  the 
distribution  of  useful  things  and  enhance  the  usefulness 
of  those  things  by  removing  them  from  the  places  and 
persons  not  wanting  them  to  the  places  and  persons 
that  want  them,  they  carry  and  fetch,  combine  and  sepa- 
rate, and  thereby  and  to  that  extent  produce  value  in 
as  true  a  sense  as  the  carpenter  or  farmer  produces 
value.  For  this  service  the  man  engaged  in  merchan- 
dising is  naturally  entitled  to  compensation.  He  has  a 
right  to  as  much  value  in  return  as  he  creates  by  his 
service  of  carrying  and  fetching.  He  must  get  the  mini- 
mum that  he  needs  to  live  upon  in  the  performance  of 
that  service,  and  to  rear  his  children.  Otherwise  he  will 
not  carry  and  fetch. 

By  far  the  principal  part  of  the  role  of  the  merchant 
consists  in  profit  taking.  It  is  true  that  the  net  returns 
gotten  by  many  merchants  are  meagre,  scarcely  afford- 
ing a  comfortable  livelihood  ;  and,  as  if  to  add  insult  to 
injury,  they  are  not  permitted  to  get  those  returns  as 
compensation  for  services  performed,  but  arc  compelled 
to  filch  them  as  profits.  It  is  the  case  of  ordained  dis- 
honesty being  manyfold  more  laborious  and  less  remune- 
rative than  an  honest  method  would  be.     But  we  cannot 

119 


120  WHY  THE  CAPITALIST? 

be  honest  under  the  system  of  society  that  prevails. 
To-day,  as  much  as  ever,  Mercury  is  the  god  of  the 
merchants  as  well  as  the  god  of  the  thieves. 

The  profit-taking  taint  so  permeates  the  whole  of 
merchandising  as  to  give  color  and  flavor  to  it  all.  Mer- 
chandising is  part  of  the  morgan's  machinery  of  exploi- 
tation.    The  culmination  of  the  process  is  here  reached. 

The  measure  and  extent  of  the  worker's  exploitation 
is  not  capable  of  being  stated  or  approximated  until  we 
get  to  the  point  where  he  receives  his  quota  of  goods  for 
consumption.  This  is  because  the  production  of  value 
in  the  goods  does  not  cease  until  that  point  is  reached. 

The  last  act  of  value  production  takes  place  when  the 
commodity  is  delivered  into  the  hands  of  the  consumer, 
thereby  ceasing  to  be  a  commodity  and  becoming  merely 
goods. 

The  process  of  producing  value  begins  when  the  raw 
material  is  first  taken  from  nature,  and  it  continues  until 
the  created  value  contained  in  finished  goods  is  delivered 
into  the  hands  of  the  ultimate  consumer.  The  length  of 
time  that  the  articles  necessarily  lie  in  storage  or  display, 
either  in  course  of  production  or  awaiting  consumption, 
and  the  incidental  labor  in  care  and  protection,  so  far  as 
necessary,  also  forms  part  of  the  process  of  production; 
but  so  far  as  unnecessary  and  avoidable,  such  labor  is 
merely  wasted.  Aside  from  the  work  necessarily  ex- 
pended in  the  distribution  of  needed  goods,  the  whole 
process  of  merchandising  is  an  unnecessary  process  of 
juggling,  in  the  scheme  to  get  profits  for  the  morgan 
under  our  present  system  of  society.  Necessarily,  the 
extent  of  the  filching  cannot  be  even  remotely  appreci- 
ated until  we  arrive  at  the  end  of  the  process.  Here  we 
have  the  expression  of  the  aggregated  value  produced 
under  the  morgan  system,  stated  by  the  morgan  in  mor- 
gan money-terms.    This  expression  is  derived  from  and 


EXPLOITATION,   CONTINUED  IN    MERCHANDISING        121 

is  rooted  in  the  amount  of  labor  power  expended  by  the 
gentile  of  the  first  order;  not  however  the  relatively  small 
amount  of  labor  power  expended  in  producing  the  amount 
of  value  now  handed  to  the  gentile  in  the  final  forms  of 
his  necessaries,  but  the  amount  of  labor  power  sur- 
rendered by  him,  in  his  duress,  to  get  the  pennies  now 
within  his  palm,  to  sustain  himself  and  his  progeny. 

Viewed  as  a  seller,  the  worker  sells  his  labor  power 
at  its  actual  cost.  Viewed  as  a  buyer  he  pays  all  that 
he  has  of  labor  power  for  his  livelihood.  His  true  posi- 
tion is  that  of  buyer.  Every  gentile  has  to  buy  his  liv- 
ing in  the  market  of  the  morgan  by  whom  he  was  ex- 
propriated; and,  unlike  the  robin,  who  simply  takes  of 
the  worms  that  nature  provides  for  all  robins,  without 
any  question  as  to  his  right,  the  gentile  finds  himself 
barred  from  his  own  store  house  by  the  morgan's  prop- 
erty rights,  so-called.  He  finds  himself  expropriated  of 
all  that  is  seizable  of  nature's  free  goods.  So  he  has  to 
buy  that  which  nature  supplies  spontaneously,  as  well  as 
the  enhancement  of  it  resulting  from  the  work  and  learn- 
ing of  his  ancestors.  All  that  he  can  offer  in  liquidation 
is  his  own  labor  power.  The  morgan  learns  that  he  can 
also  reap  a  large  profit  from  the  use  of  the  gentile's  la- 
bor power  if  he  can  get  all  of  it.  So  he  sets  that  as  the 
price.  He  takes  from  the  gentile  of  the  first  order 
all  of  his  labor  power  in  payment  for  sufficient  of  the 
necessaries  of  life  to  generate  this  labor  power  again 
from  day  to  day  and  to  insure  a  continuous  procession 
of  gentiles  to  the  morgan's  workshop  and  market  to 
meet  the  requirements  of  the  morgan's  trade  and  the 
demands  of  the  morgan's  whims. 

The  gentile  of  the  first  order  receives  coin  from  the 
morgan  as  master  of  the  job.  He  hands  the  coin  back  to 
the  morgan  as  master  of  the  supply  magazine.  This  coin 
gives  the  money-equivalent  and  money-measure  to  the 


122  WHY  THE  CAPITALIST? 

quantity  toward  which  constantly  gravitates  the  meas- 
ure of  the  amount  of  necessaries  that  the  gentile  must 
have  to  replenish  his  labor  power  and  propagate  and 
rear  his  kind.  That  fixes  the  point  around  which  hover 
the  expressions  of  the  value  measurements  of  necessar- 
ies. The  amount  that  the  gentile  of  the  first  order  can 
get  at  the  morgan's  magazine  for  the  contents  of  the  pay 
envelope  that  he  gets  at  the  morgan's  pay  car  or  pay 
office,  constitutes  the  true  wages  received  by  him  for 
the  expenditure  of  his  labor  power  under  the  morgan's 
goad.  That  also  gives  the  gauge  of  the  money  sum  ex- 
pressing for  the  time  the  quantity  of  intermingled  value 
and  free  goods  of  nature  that  all  of  the  other  gentiles  of 
the  second  and  third  orders  must  strive,  cheat,  steal 
and  struggle  for,  that  they  must  obtain,  by  fair  means  or 
foul,  to  sustain  themselves  in  life. 

To  be  sure,  there  is  an  interminable  amount  of  con- 
troversy, and  a  deal  of  striking  and  even  riot  and  mu- 
tiny, but  it  is  all  in  the  struggle  of  the  gentile  to  main- 
tain the  status  quo  as  against  the  downward  press  of 
the  morgan.  When  the  morgan  gouges  more  of  the 
surplus  value  by  raising  retail  prices  whether  it  be  di- 
rectly, or  whether  it  be  indirectly,  in  sending  up  whole- 
sale prices,  or  driving  up  rents  and  land  "values"  or 
interest  rates  or  what  not,  the  worker  of  necessity  re- 
taliates by  demanding  a  larger  money  expression  of  his 
daily  allowance.  He  really  does  not  as  a  direct  result 
of  success  in  this  effort  get  any  more  value  than  he  got 
when  the  money  expression  of  his  allowance  was  smaller 
and  the  money  expression  of  the  price  of  the  necessaries 
was  also  commensurately  smaller.  Whenever  a  revolt  of 
the  gentiles  is  successful,  the  resulting  improvement  is 
more  apparent  than  real,  and  only  of  comparatively  short 
duration.  Under  the  morgan's  pressure,  the  weight  of 
values  going  to  the  worker  is  constantly  diminishing  to 


EXPLOITATION.    CONTINUED  IN    MERCHANDISING         123 

a  lower  level.  I  say  weight  of  values,  and  by  that  I  do 
not  mean  the  money  expressions.  The  latter  have  been 
tending  upward  all  the  time  throughout  history,  but  that 
does  not  mean  that  values  are  thereby  to  the  same  extent 
permanently  affected.  When  the  money  expression  of 
values  in  everything  is  doubled,  the  volume  of  values  and 
their  relationship  will  be  as  they  were  before  the  money 
expressions  were  doubled.  Money  is  the  only  present 
medium  of  an  expression  of  value.  When  two  dollars  will 
buy  only  as  much  as  one  dollar  formerly  bought,  then 
the  two  dollars  do  not  in  reality,  represent  any  more 
value  than  the  one  dollar  did  formerly.  If  the  name  of 
a  pint  be  changed  to  "quart"  without  changing  the  vol- 
ume it  could  only  serve  to  confuse.  So  too  if  the  twelve 
ounces  in  a  pint  were  called  fifteen  ounces  or  ten  ounces. 
It  is  merely  changing  names  and  designations. 

The  goods  handed  back  to  the  worker  by  the  morgan 
through  the  intricacies  of  his  trade  are  given  back  to 
the  workers  at  their  true  value.  The  change  of  price  is 
only  a  change  in  the  name  of  the  amount.  Value  is 
about  the  only  thing  that  comes  out  true  in  the  whole 
of  the  morgan's  regime  of  chaos. 

The  worker  is  required  to  work  and  does  work  for  a 
wage  representing  just  enough  for  him  to  live  on,  propa- 
gate and  rear  his  kind.  The  necessaries  of  his  life  are 
handed  to  him  at  a  price  that  takes  from  him  all  of  the 
tags  or  money  that  represents  his  wages.  If  the  ex- 
pression of  his  tags  or  money  be  high,  as  in  newly  de- 
veloping regions,  then  the  price,  or  value  expression 
of  the  things  he  needs  tends  to  be  high,  and  if  the  value 
expression  of  the  things  he  needs  be  low.  then  the  ex- 
pression of  wages  in  tags  or  money  will  also  tend  to 
the  same  point.  The  reality  of  these  things  will  then 
not  sound  so  big  although  in  truth  the  size  of  the  reality 
has  not  changed. 


124  WHY  THE  CAPITALIST? 

The  confusion  in  the  popular  mind  on  this  question  as 
to  where  the  filching  occurs,  whether  at  the  point  of  con- 
sumption or  in  production,  is  because  our  minds  get 
twisted  in  passing  through  th.e  morgan's  labyrinth  of 
trade.  To  use  a  nautical  expression,  we  lose  our  bear- 
ings, we  lose  the  points  of  the  compass,  and  the  ques- 
tion always  is:  Where  did  we  get  twisted?  The  market 
price  is  the  true  money  expression  of  value  in  the  things 
we  need.  This  also  is  in  full  accord  with  the  morgan's 
theory  of  value,  namely,  that  the  value  of  a  thing  is  what- 
ever you  can  get  for  it.  He  gets  all  of  the  worker's 
labor  power  for  the  means  of  life  he  sells  to  him,  the 
needs  of  the  worker  take  all  of  his  wages  to  get  them. 
It  is  the  last  expression  in  money-terms  of  the  value 
measure  of  things.  Money  terms  are  however  merely  a 
medium  of  expression ;  just  as  the  money  tags  are  not 
necessarily  of  value  in  themselves  but  supply  the  names 
of  the  measure  of  value  as  well  as  constitute  a  medium 
of  exchange.  The  filching  of  the  worker  takes  place  in 
the  process  of  production.  He  is  always  producing 
more  than  he  gets.  When  his  tag-money  does  not  pro- 
cure enough  for  him  to  live  upon,  he  knows  that  his 
only  remedy  under  present  conditions  is  to  get  more 
tag-money.  Therefore  the  natural  thing  for  him  to  do, 
in  the  morgan's  state,  is  to  strike  for  more  tag-money. 
Whenever  and  wherever  the  worker  needs  less  tag-money 
to  get  the  necessaries  of  his  life,  the  amount  of  his  tag- 
money  declines  toward  the  level  of  the  amount  that  he 
needs.  This  does  not  mean  that  his  real  wages  are 
thereby  favorably  affected  except  in  thte  transition  pe- 
riods. His  real  wages  consists  of  the  purchasing  power 
of  his  pay  envelope. 

Though  the  cost  of  living  determines  the  wages  of  the 
worker,  it  must  be  borne  in  mind  that  the  amount  of 
the  worker's  wages  does  not  determine  the  price  of  the 


EXPLOITATION",   CONTINUED  IN    MERCHANDISING        125 

commodity.  Wages  are  sometimes  referred  to  in  hag- 
gling over  the  prices  of  commodities,  but  the  fact  is 
that  commodities  are  always  sold  for  as  much  as  they 
will  bring.  It  is  therefore  untrue  that  a  raise  in  wages 
drives  up  the  price  of  commodities.  It  is,  on  the  con- 
trary, the  rise  in  the  price  of  commodities  that  drives 
the  worker  to  demand  more  wages.  The  morgan  continues 
to  drive  up  the  price  of  commodities  and  uses  the  raise  in 
wages  as  a  specious  justification. 

Those  who  have  an  income  fixed  by  law  or  by  long- 
term  contracts  find  it  impossible  to  maintain  their 
standard  of  living  in  the  face  of  the  rise  in  the  price  of 
commodities.  Such  are  public  servants,  pensioners  and 
those  who  live  on  interest  from  bonds,  mortgages  and 
such  investments. 

It  is  not  of  the  slightest  concern  to  me  whether  or  not 
any  individual  or  set  of  individuals  intended  or  intends 
the  results  that  we  witness  on  every  hand.  It  is  enough 
to  know  that  such  are  the  results  produced  by  the  mor- 
gan machinery  of  society  and  state.  It  is  unnecessary 
and  answers  no  purpose  whatever  to  attach  any  moral 
turpitude.  It  is  the  underlying  social  and  economic 
forces  that  are  important  and  determining. 

Production  of  value  forms  but  a  slight  part  of  mer- 
chandising. The  great  end  and  aim  of  the  morgan  is  to 
carry  through  to  its  conclusion  the  great  game  of  filch- 
ing the  surplus  value.  When  the  manufactured  articles 
leaves  the  factory  at  a  stated  money  valuation,  that  valu- 
ation is  only  tentative  and  to  serve  the  morgan's  pur- 
pose of  trade.  It  is  not  for  the  worker,  or  to  measure 
the  amount  of  the  value  that  he  gets.  It  is  not  the 
measure  at  which  value  reaches  the  worker  as  consumer. 
The  product  is  still  under  the  control  of  the  morgan  to 
trade  and  juggle  with  for  the  purpose  of  getting  a  reali- 
zation of  the  surplus  value.     The  necessary  carrying, 


12G  WHY  THE  CAPITALIST? 

handling  and  distributing  to  the  worker  as  consumer  of 
the  product,  of  course,  adds  a  little  more  value  to  the 
product,  but  the  value  so  added,  from  the  morgan's 
point  of  view  is  only  incidental,  and  to  him  is  not  the 
inducement.  The  statements  of  the  volume  of  value  in 
the  product  at  the  factory  gate  must  therefore  be  in- 
creased by  from  400  to  500  per  cent  and  over,  before  the 
true  value-expression  of  the  goods  as  they  enter  the 
hands  of  the  worker,  as  consumer,  can  be  arrived  at. 
All  of  the  value  contained  in  the  goods  when  finally  sold 
is  created  by  the  chain  of  workers,  including  the  worker 
employed  by  the  morgan  merchant  in  his  retail  store. 
The  worker  gets  his  meager  portion  of  this  value  before 
the  final  statement  of  it  in  the  price  at  the  final  "sale." 
He  gets  it  in  wages  amounting  on  an  average  to  not 
more  than  one-fifth  of  the  value  produced,  and  he  gets 
the  wages  in  confusing  coin. 

A  very  potent  factor  in  producing  the  mental  confu- 
sion in  the  search  for  the  place  where  the  exploitation 
takes  place,  is  the  morgan's  false  theories  with  which 
he  dominates  men's  minds.  The  morgan  will  not  con- 
sider his  profit  as  being  identical  with  the  surplus-value 
produced  by  labor.  He  scouts  the  idea  that  it  is  unpaid 
for  surplus  labor.  He  forgets  the  process  of  production 
in  his  process  of  exchanging  title,  in  his  juggle.  He  is 
of  the  opinion  that  more  value  is  produced  by  exchang- 
ing the  value  contained  in  one  thing  for  the  value  con- 
tained in  other  things.  He  computes  the  rate  of  his 
profit  upon  his  evaluation  of  the  machinery,  tools,  build- 
ings and  raw  material  applied  in  the  process  of  produc- 
tion. The  morgan  never  thinks  to  compare  the  amount 
of  his  profits  with  the  amount  of  value  that  the  worker 
gets  out  of  the  product  of  his  work. 

The  morgan  assumes,  as  of  course,  that  the  matter 
of  his  getting  the  tools,  buildings  and  raw  material  in 


EXPLOITATION,   CONTINUED  IN    MER<  HANDISING        121 

exchange  for  a  /arger  or  smaller  consideration,  his  as- 
tuteness in  dealing,  bargaining  and  cheating,  and  his  and 
his  salesmen's  ability  to  dispose  of  the  finished  product 
at  more  or  less  favorable  terms  of  exchange,  enters  Into 
the  production  of  profit.  It  never  once  enters  the  head 
of  the  morgan  that  his  dealing  and  dickering  as  a  buyer, 
as  also  his  hawking  and  peddling  of  the  free  goods  of 
nature  containing  and  bearing  the  value  created  and  im- 
parted by  labor  in  most  part  unpaid  for,  and  his  great 
exercise  of  talent  to  get  in  exchange,  the  greatest  possi- 
ble amount  of  other  quantities  of  the  free  goods  of  na- 
ture, likewise  containing  and  bearing  value  created  and 
imparted  by  still  more  labor,  also  in  most  part  unpaid 
for  is  all  far  afield,  and  does  not  in  the  slighest  degree 
enter  into  the  production  of  value.  All  of  his  haggling 
relates  only  to  title,  it  does  not  otherwise  relate  to  values 
in  themselves.  It  has  only  to  do  with  the  mine  and  the 
thine  of  the  loot. 

The  morgan  never  once  thinks  that  he  could  just  as 
well  be  in  a  weighted  sack  at  the  bottom  of  the  ocean 
for  all  that  he  ever  produces  of  the  values  that  he  as- 
serts ownership  over.  It  never  dawns  upon  him  that  he 
merely  operates,  gambler  fashion,  with  the  values  of  others. 

So  far  as  society  is  concerned,  value  comes  into  ex- 
istence so  soon  as  one  person  makes  a  usefulness  avail- 
able to  another  by  placing  it  at  his  personal  service ;  as 
soon  as  goods  are  placed  in  the  hands  of  users,  and  not 
before.  Therefore,  aside  from  the  producer,  who  can  be 
the  owner  because  the  creator,  the  only  person  who  can 
be  the  true  and  natural  owner  of  value  is  the  user,  in 
other  words,  the  consumer. 

Outside  of  the  comparatively  small  amount  that  the 
morgan  himself  consumes  he  does  not  in  a  true  sense 
become  the  owner  of  any  of  the  values  that  he  wields 
dominion  over.     The  principles  involved   in   this  state- 


WHY  THE  CAPITALIST  " 

men:  ssed  in  the  chapter  on  property. 

The  morgan  cannot  by  any  means  make  personal  use  of 

all  the  products  that  he  controls,  therefore  as  to  him 

do  not  cor.--.         value  at  all.     So  far  as  deriving 

persons  aiefit  is  concerned,  the  morgan 

mig  warehouses  full  of  provisions  on 

One  morgan  might  just  as  well  sell 

I  sort  of  property  t:  ad  juggle  with  it  to 

tent  and  until  his  profits  in  that  business 

fill  o  -      Yet  there      ill  not 

.    been    enov_  e    produced    or    effected    by    the 

trade  to  feed  a  flea.     But  no  harm  will  have  been  done 

:her.     The  .  .artians  are  protected  by  the 

etween  the  mo:.  mies  and  navies 

and  their  planet,  and  therefore  will  continue  enjoying  the 

meat  and   potatoes    in  those  warehouses   without  ever 

ibont     the     morgan's 
owr.  But  on  this  planet  things  are  quite  d: 

gh  the  morgan  could  ell  be  on  the 

other  planet,  hi-  ite  entrench  him  in 

his  claim  to   control   the   things  he   cannot  own.     His 

-    -::,:e  clubs  us  all  into  a  sub- 
3n  to  his  claims  and  terms. 
Though  the  morgan  by  virtue  of  his  domination  over 
the   _         rces   of  nal  mes   like  dominion  over 

rplus  expenditure  of  labor  power, 
he  is  not  the  but  the  small  part  that  he 

cons         -  He  is  not  and  cannot  in  the  na- 

ture of  :  .  the  owner  of  the  residue.    The  product 

n  of  the  social  rela- 

•  or  of  human  society,  until  it  is  delivered  by  the 

vorker  to  the  consumer  and  until  then  does  not  con- 

alue.     Therefore  under  the  morgan's  dominion 

and  -  not  and  cannot  be  value,  save  in  a 

tentative  sense  only. 


EXPLOITATION,   CONTINUED  IN    MERCHANDISING 

Here  it  is  suggested  that  the  reader  recall  in  this  con- 
nection what  was  said  of  the  nature  of  value  in  the 
chapter  devoted  to  that  subject.  It  must  be  remembered 
that  three  things  must  accrue  and  concur,  namely,  hu- 
man labor,  usefulness  and  service  to  another  as  the  user. 
These  three  necessary  elements  do  not  accrue  or  concur 
until  the  result  of  human  labor  is  handed  over  to  the 
user,  that  is,  to  the  consumer.  When  the  worker  hands 
the  result  of  his  work  over  to  the  morgan,  the  latter  does 
not  take  it  to  use,  but  to  control  it  so  as  to  get  power 
over  an  equivalent  of  its  value  from  the  user.  The  final 
condition  necessary  to  constitute  value,  service  to  the 
user,  has  not  yet  been  achieved.  The  embodied  efforts 
of  the  worker,  crystalized  labor,  as  it  were,  has  not  yet 
become  value  in  the  economic  sense.  The  value  is  still 
inchoate.  Though  it  may  be  nearer  a  culmination  into 
accrued  value  than  coal  at  the  bottom  of  the  sea  or 
goods  on  another  planet,  and  notwithstanding  the  po- 
tentialities, the  difference  in  the  situation  is  one  of  degree 
merely.  In  principle  all  of  this  embodied  or  crystalized 
labor,  this  inchoate  value,  might  as  well  be  at  the  bottom 
of  the  sea  or  on  another  planet.  The  morgan  is  not  the 
user  of  that  which  he  is  holding.  What  can  the  possible 
difference  be  if  the  morgan  has  it  on  another  planet  or 
in  his  warehouse  or  on  the  wharf  with  his  property 
mark  on  it,  so  long  as  he  has  the  power  to  deny  as 
the  right  to  use  it.  It  surely  cannot  be  of  the  slightest 
difference  to  the  would  be  user.  He  is  kept  out  of  the 
use  of  it  until  the  morgan  has  juggled  with  it  as  whole- 
saler and  then  juggled  with  it  as  retailer.  The  morgan 
has  it  within  his  power  to  destroy  the  goods.  He  holds 
them  for  the  greatest  price  he  can  get  for  them.  The 
greatest  price  the  worker  can  pay  is  the  sum  of  his 
allowance  from  the  morgan  for  expended  labor  power. 
Now  it  does  not  and  cannot  make  a  particle  of  difference 


130  WHY  THE  CAPITALIST? 

if  this  allowance  is  expressed  in  copper  pennies,  in  paper 
money  or  in  gold  dollars,  in  checks  on  the  bank  or  in 
store  orders,  except  that  if  in  one  form,  the  worker  may 
run  around  a  little  more  than  if  in  another  form  and 
imagine  himself  freer. 

When  the  morgan  gives  the  medium  or  tag-money  to 
the  worker,  it  is  his  intention  to  give  to  the  worker  his 
living  wage,  the  amount  necessary  for  him  to  have  in 
order  to  live,  replenish  his  labor  power  and  continue 
his  kind.  That  is  the  measure  under  the  morgan's  wage 
system,  and  that  is  where  it  always  gravitates  to.  We 
lose  sight  of  the  drift,  direction  and  goal  because  our 
minds  are  confused  by  the  psychological  twists  that  we 
get  at  every  turn  in  the  maze.  We  are  beguiled  by  im- 
posing store  fronts,  showy  displays,  costly  wastefulness, 
deceiving  advertisements,  false  puffing,  false  naming, 
false  measuring,  false  grading  and  false  weighing  of 
goods,  the  employment  of  swarms  of  miserably  under- 
paid, mostly  unnecessary,  clerks,  drawn  from  the  over- 
stocked labor  market  and  paraded  in  a  show  of  pseudo- 
prosperity.  All  of  this  is  done  to  make  the  grand  im- 
pression. Clerks,  trained  in  alluring  smirks  and  bar- 
gain-counter buffoonery,  keep  the  mind  in  such  a  whirl 
that  it  cannot  grasp  or  appreciate  that  it  makes  no  dif- 
ference how  many  profit-taking  morgans  and  morgan 
contrivances  there  may  seem  to  be  or  how  many  differ- 
ent morgan  faces  are  presented,  so  far  as  the  producer 
and  the  rest  of  mankind  is  concerned  it  is  all  one  mor- 
gan, pursuing  ever  the  same  interest,  actuated  by  the 
same  motive — to  get  the  surplus  value  for  nothing.  It 
is  not  a  matter  of  persons.  It  is  a  play  and  conflict  of 
interests.  The  interests  of  those  who  take  without  giv- 
ing in  return  are  always  identical  so  far  as  the  de- 
spoiled are  concerned.  Therefore  it  is  perfectly  fair,  and 
conduces  much  to  clear  reasoning  to  treat  all  the  mor- 


EXPLOITATION,   CONTINUED  IN    MERCHANDISING        131 

gans  as  one  morgan.  It  is  all  one  system  of  society  that 
he  is  operating.  It  is  all  just  one  profit-grinding  mill. 
Society  is  all  just  one  plant  that  belongs  to  the  morgan, 
and  is  ruled  by  him. 

Suppose  the  morgan  when  he  "paid"  the  worker  for 
one  day  gave  him  an  order  on  the  depot  of  distribution 
for  two  pounds  of  beef,  two  quarts  of  potatoes,  two 
pound  loaves  of  bread,  a  pound  of  sugar,  a  peck  of  coal, 
a  half  pound  of  butter,  an  ounce  of  salt,  two  ounces  of 
coffee,  six  eggs,  a  yard  of  cotton  cloth,  a  spool  of 
thread,  a  quart  of  apples,  a  pound  of  soap,  a  quart  of 
milk  and  a  pint  of  beer;  and  suppose,  for  the  purpose 
of  this  illustration  that  these  articles  constituted  all  of 
the  worker's  daily  needs,  to  live,  replenish  his  labor 
power,  propagate  and  rear  his  kind.  We  should  here 
have  his  wage  expressed  directly  and  in  kind.  If  qual- 
ity be  also  specified  there  would  be  no  room  or  oppor- 
tunity for  deception  or  confusion  of  opinion  as  to  the 
nature  of  the  transaction.  If  these  articles  contained 
in  value  say  one-fifth  of  the  amount  that  the  worker 
produced  in  a  day,  no  one  would  find  it  in  the  least 
difficult  to  understand  that  the  exploitation  of  the 
worker  took  place  in  the  process  of  production. 

It  will  be  seen  at  once  that  the  worker  gives  up  to  the 
morgan  five  times  as  much  as  he  gets.  Now  if  the  mor- 
gan decided,  for  the  sake  of  convenience,  saving  of  la- 
bor in  book-keeping,  or  for  a  show  of  liberality  or  of  the 
worker's  freedom,  to  give  to  the  worker  for  each  day 
of  ten  hours  labor  power  expended,  a  piece  of  paper, 
or  some  copper  or  silver  coin,  calling  it  in  the  aggregate 
the  sum  of  two  dollars,  and  representing  the  same 
amount  of  value,  namely  the  value  produced  by  the  ex- 
penditure of  two  hour's  labor  power,  and  if  this  sum 
of  dollars  .gets  for  the  worker  at  the  morgan's  store 
the  same  goods  in  quantity  and  quality  that  he  got  be- 


132  WHY  THE  CAPITALIST? 

fore,  can  any  sane  person  say  that  by  this  piece  of  leg- 
erdemain the  exploitation  has  been  changed  from  the 
process  of  production  to  the  point  of  consumption?  The 
worker  simply  gets  two  units  of  value  out  of  every  ten 
that  he  produces.  Whether  he  gets  it  in  the  very  form 
that  he  produces  it  in,  or  gets  it  in  store  orders  or  gets 
it  in  copper  pennies  or  silver  coin  or  paper  money,  makes 
no  difference  in  principle,  leaving  out  of  consideration 
any  greater  opportunity  under  one  system  than  under 
another  for  cheating  and  befuddling. 

The  object  and  purpose  of  the  morgan's  wage  system 
is  to  exact  from  the  worker  an  expenditure  of  the  great- 
est possible  amount  of  labor  power  in  the  production 
of  value,  and  to  give  to  him  in  return  as  much  only  as 
he  needs  to  live  upon,  replenish  his  labor  power,  pro- 
pagate and  rear  his  kind.  The  stuff  that  he  gets,  called 
money,  is  not  in  itself  the  value  the  worker  gets.  It  is 
merely  a  medium.  It  is  a  general  order  on  the  store. 
But  it  is  saturated  with  the  vice  of  shiftiness.  If,  when 
the  worker  takes  this  morgan  money  of  two  dollars  to 
the  morgan  store  he,  calls  for  the  same  above-enum- 
erated necessaries,  the  store  keeper  figures  up:  "Beef, 
.70,  potatoes  .20,  bread  .20,  sugar  .10,  coal  .10,  butter 
.20,  salt  .02,  coffee  .05,  eggs  .20,  cotton  cloth  .10,  thread 
.05,  apples  .05,  soap  .05,  milk  .08,  beer  .05,  and  says: 
"You  are  short  fifteen  cents,"  then  the  worker  was 
simply  despoiled  as  worker  to  the  additional  amount 
of  value  now  represented  by  15  cents,  and  he  must  go 
on  short  rations  until  the  balance  is  restored.  He  re- 
ceived that  much  less  than  the  amount  of  value  that  he 
produced  in  two  hours.  He  was  simply  filched  ad- 
ditionally of  that  amount  in  the  process  of  production. 
The  principle  cannot  be  changed  by  saying  that  "beef 
has  gone  up." 

Under    the    morgan    system    value    is    measured    and 


EXPLOITATION,   CONTINUED  IN   MERCHANDISING        133 

stated  in  terms  of  money.  The  evaluation  is  based  upon 
the  market  price.  That  means  that  a  thing  is  worth 
what  you  can  get  for  it.  The  morgan  fixes  the  price, 
or  money  equivalent,  or  money  statement  of  the  value 
contained  in  things  at  the  end  of  the  process  of  pro- 
duction, in  his  morganized  society,  namely,  at  the  store 
where  the  user  gets  the  product.  The  morgan  there 
gets  his  statement  of  price  and  his  evaluation  of  neces- 
saries accepted  as  an  expression.  That  is  then  the  name 
of  the  measure,  for  the  time  being,  of  the  value  that  the 
worker  has  produced.  The  name  is  in  figures  and  the 
figures  are  always  changing.  The  morgan  is  constantly 
striving  to  press  clown  the  amount  consumed  by  the 
worker  by  raising  the  figures  at  the  store;  and  the 
worker  as  constantly  strives  to  keep  up  to  the  line  of 
his  needs  by  demanding  a  corresponding  enhancement 
of  the  figures  in  his  pay  envelope.  The  morgan  also 
sometimes  reduces  the  amount  in  the  pay  envelope.  So  the 
worker  may  be  hit  from  either  side. 

If  the  reader  will  bear  in  mind  the  elements  of  value 
and  will  hold  fast  to  the  analysis  of  production,  he  will 
have  no  difficulty  in  understanding  that  in  our  society 
the  production  of  value  begins  with  the  taking  of  the 
raw  material  from  nature,  and  does  not  cease  until  the 
goods  are  delivered  into  the  hands  of  the  consumer  or 
user.  All  the  accessories,  contrivances  and  processes 
constitute  one  gigantic  plant  in  which  one  worker  does 
work  that  goes  into  the  material  furnished,  which  is 
then  passed  on  to  another  worker  for  him  to  perform 
more  work  upon,  that  the  process  continues  until  the 
final  product  is  delivered  to  the  final  consumer.  There- 
fore no  statement  of  the  value  of  the  product  can  be 
accepted  or  regarded  as  fixed  or  stable  until  the  process 
is  completed. 

The  difference   between   the   amount  that   the   aggre- 


134  WHY  THE  CAPITALIST? 

gated  workers  have  produced  in  value,  and  the  amount 
that  they  get  is  the  amount  of  their  exploitation.  It 
makes  no  difference  whether  one  morgan  or  a  dozen 
intervene,  or  whether  the  exploitation  be  cast  up  in 
kind,  or  in  money,  the  measure  of  the  exploitation  is 
just  the  same.  The  exploitation  is  of  the  workers  as 
producers  of  value. 

The  whole  scheme  of  exploitation  may  very  well  be 
likened  to  the  Chinaman  and  the  pelican.  The  pelican 
is  a  natural  fisherman,  and  a  most  adept  one  at  that. 
The  Chinese  capture  this  bird  and  place  a  ring  around 
its  neck  fitting  close  enough  to  prevent  the  fish  from 
passing  down  the  pelican's  throat.  The  pelican  is  tied 
to  a  rope  long  enough  to  allow  of  a  sufficient  area  to 
operate  in,  and  put  to  work.  The  Chinaman  superin- 
tends the  job,  and  takes  care  of  the  fish  as  fast  as  caught. 
The  pelican's  wages  consists  of  the  heads  and  entrails 
of  the  fish.  He  gets  enough,  to  keep  him  working  and 
producing  young  pelicans  so  as  to  continue  and  possi- 
bly extend  the  business. 

There  can  hardly  be  any  doubt  that  the  pelican  is  ex- 
ploited as  a  worker.  The  exploitation  is  in  the  process 
of  production.  That  which  he  produces  is  taken  away 
from  him  by  the  man  who  has  obtained  the  mastery 
over  him  and  barred  him  out  from  a  free  access  to  the 
resources  of  nature.  It  certainly  cannot  make  any  dif- 
ference if  the  Chinese  master  has  a  thousand  pelicans 
with  dozens  of  superintendents  and  foremen  to  see  that 
things  go  right.  Nor  can  it  make  any  difference  if  the 
interim  between  the  catching  of  the  fish  by  the  pelican 
and  the  getting  of  his  rations  of  offal  be  occupied  by  the 
attention  of  only  one,  ten  or  a  hundred  Chinamen. 
What  if  these  do  strut  around  calling  themselves  inde- 
pendent business  men  of  superior  brains  ?  That  does 
not  change  the  process  or  the  effect. 


EXPLOITATION,  CONTINUED  IN   MERCHANDISING        13S 

Suppose  the  foreman  that  oversees  the  fishing-  opera- 
tions keeps  a  time  account  of  each  pelican,  and  a  pay- 
master comes  around  once  a  week  and  gives  each  peli- 
can an  envelope  containing  tags  of  metal  or  slips  of 
paper  with  which  the  pelican  has  to  go  to  any  one  of 
a  number  of  places  to  get  his  allowance  of  fish  heads 
and  entrails.  It  cannot  be  of  the  slightest  moment 
which  Chinaman  has  the  longest  queue,  whether  it  be 
the  one  that  takes  the  fish  out  of  the  pelican's  mouth, 
or  the  one  that  hands  out  the  pelican's  pay  envelope 
or  the  one  that  gives  to  the  pelican  his  final  reward  of 
fish  heads  and  entrails.  Nor  does  it  matter  what  sort 
of  book-keeping  the  Chinamen  have,  or  if  they  have 
any.  Nor  does  it  matter  which  individual  Chinaman 
is  a  creditor  and  which  a  debtor  or  what  the  mine  or 
the  thine  of  it  all  is.  No  juggle  or  shuffle  or  slight-of- 
hand  can  change  the  nature  of  the  business  or  make  it 
anything  else  than  a  chain  of  connecting,  interdepend- 
ent, constituent  doings  that  together  form  one  insepar- 
able transaction. 

Legerdemain  has  and  may  for  some  time  yet  con- 
tinue to  have  the  power  to  confuse  the  mind,  but  it  can 
not  change  the  inherent  nature  of  the  process  or  its  re- 
sults. The  whole  purpose  and  the  only  purpose  of  the 
Chinaman  in  having  the  pelican  to  work  for  him  is  to 
get  the  fish  that  the  pelican  catches  and  is  not  permitted 
to  eat.  The  exploitation  of  the  pelican  is  therefore  in 
the  process  of  production.  Suppose  the  astute  China- 
man also  undertakes  to  gouge  from  the  pelican  some  of 
his  needed  allowance  of  fish  heads  and  entrails,  tells 
him  that  the  price  of  these  things  has  gone  up;  and 
suppose  the  pelicans  all  go  on  strike  for  more  tags  and 
slips  of  paper  in  their  pay  envelopes.  Then  suppose 
the  Chinese  boss,  called  employer,  tries  to  divide  the 
responsibility  for  things  being  in  such  a  condition  and 


136  WHY  THE  CAPITALIST? 

tells  the  pelicans  that  he  is  not  to  blame  for  the  high 
cost  of  living,  and  that  it  must  be  that  they  are  living  too 
high. 

Suppose  the  boss  tells  the  striking  pelicans  that  they 
are  a  stupid  lot  or  anarchists,  that  they  should  take 
themselves  away  and  go  some  where  else,  that  he  for- 
bids them  from  fishing  in  these  waters  because  these 
waters  are  his  private  property.  If  the  boss  and  the 
master  or  any  number  of  them  in  this  way  own  all  the 
waters,  because  they  can  club  all  of  the  pelicans  away 
from  them,  then  it  becomes  merely  a  question  of  en- 
durance. It  will  be  a  question  of  how  long  the  master 
can  feel  content  to  do  without  the  fish,  and  how  long 
the  pelicans  can  do  without  tags  for  fish  heads  and  en- 
trails. 

All  of  the  vapid  talk  of  business  and  business  enter- 
prise serves  and  can  serve  only  one  end,  and  that  is  to 
Gover  up  and  hide  the  process  of  exploitation. 


CHAPTER  XII. 
VALUE,  PRICE  AND  PROFIT. 

We  have  seen  that  all  value  is  the  result  of  the  ex- 
penditure of  labor  power;  that  the  cost  of  the  labor 
power  to  the  morgan  is  the  cost  of  producing"  that  labor 
power,  namely,  the  amount  of  value  and  free  goods  of 
nature  necessary  to  keep  the  worker  in  working  condi- 
tion and  to  support  his  family;  that  if  the  worker  pro- 
duces enough  value  in  two  hours  to  equal  the  dole  called 
wages  that  he  gets,  all  the  rest  that  he  produces  in  the 
remaining  eight  hours  is  surplus  value  and  goes  to  the 
morgan  as  profits.  That  is  equally  true  when  through 
the  organization  and  division  of  labor  and  the  intro- 
duction of  machinery  and  power,  the  productivity  of  hu- 
man effort  is  increased.  All  of  the  enhanced  surplus 
goes  to  the  morgan.  Every  time  the  machines  are 
speeded  up  a  little  more,  the  morgan  gets  the  benefit 
of  the  resulting  increase  in  production.  When,  by  im- 
proved methods  and  machinery,  we  shall  arrive  at  that 
stage  where  the  worker  in  one  hour  in  each  day  pro- 
duces enough  goods  to  provide  for  his  and  his  family's 
keep,  the  only  real  benefit  of  the  improvement  under 
present  economic  conditions  will  be  the  benefit  that  the 
morgan  gets  in  the  shape  of  a  still  further  enhance- 
ment of  his  pile  of  surplus  value. 

The  tangible,  material  thing  in  the  form  presented  to 
us  after  labor  power  has  been  expended  upon  it,  is 
merely  the  container  and  vehicle  of  the  value  conveyed. 
The  creation  of  value  begins  with  the  first  human  effort 
bringing  forth  the  raw  material.  Every  succeeding  hu- 
man act  performed  upon  that  material  to  make  it  serve, 

137 


138  WHY  THE  CAPITALIST? 

or  more  available  to,  some  human  want  adds  more  value 
even  though  that  value  be  inchoate,  or  unrealized.  This 
continues  until  the  material  in  its  final  form  is  deliv- 
ered to  the  ultimate  consumer.  When  the  consumer 
receives  the  article,  he  pays  or  obligates  himself  to  pay 
a  stipulated  price  for  it,  except  in  case  of  gift,  when  the 
giver  pays  or  binds  himself  to  pay  the  price.  This 
price  at  the  end  of  an  article's  productive  history  is  the 
agreed  valuation,  the  expression  in  money  terms  of  the 
quantity  of  value  contained  in  the  article.  This  expres- 
sion of  the  volume  of  value  in  terms  of  money  is  en- 
tirely artificial,  as  money  itself  is  entirely  artificial. 

A  true  and  natural  expression  and  measure  of  value 
would  be  based  upon  labor  time.  The  amount  of  labor 
time  expended  in  producing  an  article,  from  the  first 
raw  material  until  delivered  to  the  consumer,  is  the 
true  value  of  that  article.  An  equivalent  of  labor  time 
is  therefore  the  true  and  natural  price.  It  alone  can 
express  value  truly.  Whether  this  equivalent  be  rend- 
ered directly  by  the  expenditure  of  the  measured 
amount  of  labor  time,  or  be  paid  in  the  form  of  some 
other  article  containing  and  conveying  a  like  quantity 
of  value  resulting  from  the  like  amount  of  expended 
labor  power,  cannot  make  any  difference  in  principle. 

The  natural  measure  and  basis  of  exchange  is  labor 
time  for  labor  time.  The  difference  between  the  value 
produced  by  skilled  labor  time  and  unskilled  labor  time 
does  not  militate  against  this  just  and  natural  prin- 
ciple. The  difference  is  easily  equated  on  the  basis  of 
simple  unskilled  labor  time.  Add  to  the  time  expended 
by  the  skilled  worker  a  computed  amount  of  additional 
time  for  the  time  expended  in  learning  his  trade,  or 
acquiring  his  skill,  and  the  much  talked  of  difference 
between  skilled  labor  and  simple  labor  vanishes  at  once. 
We   have  to  pay  the  boss  plumber  for  the  time   con- 


VALUE,  PRICE  AND  PROFIT  139 

sumed  by  the  journeyman  in  the  simple  labor  of  coming 
to  and  returning  from  his  job,  as  well  as  for  the  time 
consumed  in  skilled  labor  on  the  job.  Learning  a  trade 
or  a  profession  is  the  same  in  principle  as  going  to  the 
job.  The  acquiring  of  the  skill  is  only  the  preliminary 
labor,  the  same  as  the  making  of  the  tool  is  preliminary 
labor.  Only  in  the  making  of  the  tool  the  labor  is  di- 
vided under  modern  methods. 

Under  our  present  system  of  society,  the  value  in  each 
article  containing  value,  as  it  is  finally  delivered  to  the 
consumer  is  expressed  in  and  measured  by  an  artificial 
medium  of  exchange  called  money.  The  conventional 
economists  say  that  money  is  gold,  either  in  tangible 
form  or  in  symbolical  media,  such  as  bills,  bank  notes, 
silver  and  copper  coin.  For  the  present,  I  will  only 
say  as  to  that  assertion,  that  gold  is  also  a  commodity 
like  all  other  subjects  of  barter  and  sale,  and  that  it 
would  not  have  become  money  unless  it  had  required 
human  effort  to  get  it  out  of  the  ground ;  and  that  all 
of  the  value  that  gold  contains  is  the  result  of  the  ex- 
penditure of  human  labor  power,  just  as  in  other 
articles. 

The  computation  of  the  price  of  an  article  delivered 
in  sale  to  the  consumer  is  not  based  upon  any  consid- 
eration of  the  amount  of  value  theretofore  imparted  to 
it.  It  is  based  entirely  upon  the  business  principle  of 
getting  as  much  in  return  for  it  as  the  buyer  can  be  in- 
duced to  pay.  The  aggregate  of  the  amounts  allowed 
to  the  series  of  workers  for  the  values  they  produce  is 
much  less  than  the  price  paid  by  the  consumer  for  the 
sum  of  their  values.  One  or  the  other  is  false.  Roth  cannot 
be  rendered  true  by  juggling  the  measure  into  money  terms 
and  forms. 

For  the  purpose  of  obtaining  a  much  larger  price 
from  the  consumer  than  was  allowed  to  the  worker  for 


140  WHY  THE  CAPITALIST? 

producing  the  value,  a  large  portion  of  the  value  finally- 
realized- is  expended  in  advance  of  the  final  sale,  in 
puffing,  advertising  and  displaying  the  goods,  and  in  a 
parade  of  business,  all  to  impress  consumers  with  an 
inflated  idea  of  the  desirability  of  the  articles  on  sale 
and  to  induce  the  consumer  to  buy  wastefully,  to  swell 
the  profits.  All  of  this  expenditure  to  attract  customers, 
pulling  them  from  one  store  to  another,  lying  to  them, 
deceiving  and  befuddling  them  with  bargain  counter 
sales,  etc.,  is  nothing  but  waste. 

The  following  table  of  units  will  show  how  the  dif- 
ference between  the  prices  paid  to  the  workers  for  the 
values  they  produce  and  the  prices  paid  by  the  workers 
as  consumer  of  these  same  values  is  made  up,  showing 
how  amounts  are  gotten  by  the  many-visaged  person- 
age, the  morgan,  for  an  article  sold  at  a  valuation  fin- 
ally agreed  upon  in  the  morgan's  market  under  the  mor- 
gan's domination: 

— Manufacture —  Transpor-  Merchan- 
Raw  M.  Stage  1  Stage  2       tation       dizing.     Total 

Worker 8     +     40     +     40     +     20     +     40     =  148 

Ground   Rent    7     +     35     +     35     +     15     +     50     =  142 

Int.   on  Loans 5     +     25     +     25     +     15     +     25     =  95 

Profit 10     +     60     +     60     +     30     +     75     =  235 

Advertising 1     +       2     +       3     +       2     +     50     =  58 

Waste  Labor   2     +     ID     -j-     15     +     15     +200     =  242 

Selling  price  in  units 920 

Aggregate   allowance  to  worker 148 

Aggregate  of  exploitation  772 

There  is  no  claim  that  these  figures  are  accurate  or 
even  relatively  correct.  No  reliable  figures  are  avail- 
able. These  figures  are  my  own,  merely  speculative  and 
without  authority.  They  are  given  only  to  show  the 
operation  of  the  system  and  the  general  relative  re- 
sults. 

Nine  hundred  and  twenty  units  is  the  price  of  the 
article  sold.     That  is  what  it   is  prized  at  by  the  seller 


VALUE,  PRICE  AND  PROFIT  141 

and  buyer.  They  agree  upon  that.  It  cannot  affect  the 
result  to  express  this  evaluation  in  money.  Money  is 
worth  only  what  it  will  buy,  and  owing  to  its  constant 
fluctuation  in  buying  power,  its  service  in  the  present 
discussion  cannot  be  satisfactory.  If  we  should  say 
that  the  920  units  are  equivalent  to  $920.00  or  $92.00  or 
$9.20,  it  could  make  no  difference  whatsoever,  for  then 
the  amount  the  worker  gets,  namely,  148  units,  would 
correspond,  and  would  be  either  $148.00  or  $14.80  or 
$1.48. 

The  possible  variation  in  figures  expressing  value  in 
terms  of  money  are  so  many  and  multifarious  as  to 
confuse  the  understanding,  owing  to  the  constant  fluct- 
uation of  the  purchasing  power  of  money  under  the 
present  haphazard  fixing  of  prices. 

This  subject  of  money  and  its  purchasing  qualities 
and  powers  will  be  gone  into  more  deeply  in  a  subse- 
quent chapter  on  money. 

It  is  fair  to  assume,  and  we  must  assume  that  the 
admeasurement  of  920  units,  agreed  to  by  the  morgan 
as  the  seller,  in  fact  imposed  upon  us  and  enforced  by 
him  in  the  operation  of  his  system,  and  accepted  by  the 
gentile  as  buyer,  is  a  fair  and  just  evaluation  and  aver- 
age rate.  The  morgan  at  any  rate  cannot  deny  its  fair- 
ness since  he  and  his  system  have  imposed  and  estab- 
lished it.  Furthermore  it  serves  only  as  an  ultimate 
term  and  designation  of  the  quantity  of  the  value.  It 
is  only  a  name  and  one  name  or  designation  is  as  good 
as  another  here.  If  it  operated  at  all  to  establish  an  un- 
fair rate  under  the  morgan  standard  the  purchaser  could 
not  continue  buying  according  to  it.  He  might  do  so 
once  or  twice,  but  he  could  not  be  doing  so  all  of  the 
time.  A  disturbance  would  surely  result.  The  service 
or  sustenance  in  the  commodity  must  balance  the 
amount  of  value  contained  in  the  designation  920  units. 


142  WHY  THE  CAPITALIST? 

Cheating,  of  course,  cannot  be  considered  as  affecting 
the  general  proposition. 

•Here  we  have  148  units  going  to  the  gentile  of  the 
first  order  for  the  920  units  that  he  produced.  The  plan 
and  method  of  the  division  and  the  waste  of  the  spoils, 
are  of  not  the  slightest  consequence  to  him.  It  is  suf- 
ficient to  know  that  he  is  exploited  and  that  his  ex- 
ploitation is  a  natural  result  of  his  expropriation. 

Nor  would  it  shed  any  different  light  on  the  subject 
if  we  could  by  any  sort  of  calculation  determine  how 
much  tribute  for  the  free  goods  of  nature  is  exacted  by 
the  morgan  in  addition  to  the  772  units,  purloined  from 
the  gentile's  labor.  The  morgan  has  grabbed  and  mixed 
all  and  the  whole  of  everything,  so  that  such  a  compu- 
tation cannot  be  made.  He  has  produced  a  situation 
of  confusion,  himself,  and  he  cannot  claim  the  right  to 
profit  from  his  own  wrongdoing. 

The  worker  is  an  unwilling  customer,  driven  into  the 
morgan's  market  to  buy  his  living.  The  means  of  that 
living  amount  to  148  units.  The  price  at  the  time  im- 
posed by  the  morgan  upon  the  gentile  worker  for  those 
148  units  is  920  units.  The  gentile  worker  pays  over  the 
demanded  920  units  in  kind  and  in  advance.  He  pays 
it  in  value-producing  labor  power.  He  then  gets  his 
return  of  148  units  in  tickets  or  orders  on  the  supply 
magazine  to  replenish  his  labor  power  and  life.  These 
tickets,  or  orders,  are  in  a  form  called  money.  He  is 
taught  to  accept  readily  the  statement  that  this  dis- 
guised dole  represents  all  that  his  work  is  worth.  When 
he  comes  to  exchange  this  dole  for  true  values  and  free 
goods  of  nature  again,  to  live  upon,  he  finds  that  he 
does  not  receive  anything  near  like  the  quantity  that  he 
gave.  Instead  of  getting  920  units,  he  gets  only  14S 
units.  That  is  all,  and  that  was  all  that  his  money 
wages    ever    in    truth,    represented.      The    conventional 


VALUE,  PRICE  AND  PROFIT  1 13 

economist  then  tells  him  in  mock-wisdom  that  the  trou- 
ble is  in  the  high  cost  of  living.  The  morgan  brutally 
tells  him  the  trouble  is  in  the  cost  of  his  high  living. 
These  two  statements  only  vary  in  this :  The  first  is  the 
result  of  an  immature  and  half-baked  theory;  the  sec- 
ond is  simply  a  brutal  rebuff,  calculated  to  depress  and 
humiliate.     They  are  equally  false. 

For  the  purpose  of  furnishing  concrete  illustrations  to 
interpret  and  illustrate  a  wide  range  of  facts  and  experi- 
ences, let  us  indulge  the  following  consideration :  Un- 
der a  merchandising  system  of  distribution  there  could 
be  two  natural  computations  of  the  prices  of  goods  in 
exchange  or  sale.  Each,  however,  differs  from  the  other. 
They  begin  at  the  opposite  ends  of  the  process. 

The  one  computation  would  give  each  producer  of 
value  the  full  equivalent  of  the  number  of  units  of  labor 
performed  by  him,  weighted  on  the  basis  of  simple  la- 
bor, and  thus  arrive  at  the  price  of  the  completed  arti- 
cle in  the  consumer's  hands,  by  multiplying  the  total  of 
the  units  of  simple  labor  by  the  standard  measure  of 
value  of  each  unit.  Here  the  standard  for  measuring 
value  would  be  established  at  the  beginning  of  the  pro- 
cess of  production,  and  would  be  advanced  by  multipli- 
cation. 

The  other  computation  would  be  to  begin  with  the 
standard  of  value  fixed  upon  the  goods  at  their  price  in 
the  hands  of  the  consumer,  and  then  proceed  by  a  di- 
vision of  this  aggregate  final  value,  expressed  by  the 
selling  price,  giving  to  each  worker  the  proportion  of  the 
realized  price  that  the  amount  of  labor  units  performed  by 
him  bears  to  the  whole. 

Either  computation,  with  the  elimination  of  all  waste 
incidental  to  the  profit-taking  system,  would  insure  to 
each  worker  the  full  equivalent  of  the  value  produced  by 
his  labor.    It  would  not  be  of  any  consequence  how  we 


144  WHY  THE  CAPITALIST? 

named  or  designated  the  unit  of  value  or  labor  power 
under  the  one  method,  or  how  we  named  or  designated 
the  price  that  designates  the  aggregate  realized  value 
contained  in  the  article  in  the  hands  of  the  final  con- 
sumer under  the  second  method.  The  whole  problem 
would  be  reduced  to  an  arithmetical  basis,  either  way. 

It  is  not  urged  that  such  a  system  would  be  practic- 
able under  the  morgan's  system  of  society.  It  is  quite 
likely  that  it  would  be  wholly  impracticable  under  the 
present  regime.  No  system  is  possible  now  that  ex- 
cludes profit  taking.  The  morgan  thrives  on  the  lack  of 
all  system.  He  is  consistent  in  pursuing  one  principle 
in  his  business  and  that  is  to  beat  the  workers  down  to 
an  acceptance  of  the  lowest  allowance  for  their  labor 
power  so  that  he  might  have  the  largest  possible  amount 
of  surplus  value. 

The  labyrinth  of  the  morgan's  business  always  has 
the  same  beginning  and  the  same  ending.  It  begins 
with  the  expropriation  of  all  the  gentiles,  continues 
through  its  mazes  in  exploitation  of  the  gentiles  of  the 
first  order  and  emerges  in  unearned  profits. 

The  truth  of  the  matter  is  that  a  robbery  occurs  in 
the  process  of  production.  The  gentile  of  the  first  order, 
and  wage  worker,  is  in  fact  robbed  in  two  capacities. 
First,  he,  in  common  with  the  other  gentiles  who  do  not 
wrork  for  wages,  but  manage  by  hook  or  by  crook  to  get 
their  livelihood  in  the  exercise  of  some  art  or  profession, 
or  in  a  little  struggling  business,  or  as  protectors  of  the 
morgan,  in  the  capacity  of  his  police,  intellectual  or 
otherwise,  are  robbed  as  gentiles.  All  these  are  expro- 
priated of  their  proportion  of  the  free  goods  of  nature, 
barred  out  from  their  share  of  nature's  b'ounty,  deprived 
of  a  participation  in  the  wealth  resulting  from  the  learn- 
ing of  and  the  improvements  wrought  by  our  ancestors 
jointly  and  in  common.     Then  the  gentile  of  the  first 


VALUE,  PRICE  AND  PROFIT  1  1 5 

order  is  also  robbed  in  the  capacity  of  wage  worker.  He 
is  exploited  by  the  morgan  who  claims  to  be  furnish- 
ing him  with  an  opportunity  to  buy  his  livelihood.  As 
compensation  for  that  pretended  kindness,  the  morgan 
takes  all  that  the  gentile  worker  produces,  over  and 
above  the  bare  amount  necessary  to  buy  that  livelihood 
and  the  livelihood  of  his  wife  and  children.  It  is  like 
the  dishonest  tavern  keeper  who  gets  a  man  drunk  and 
then  robs  him  by  keeping  the  change  of  big  bills  as  the 
man  makes  further  purchases. 

The  old  Dutch  settlers  in  this  country  are  given  much 
credit  in  our  school  histories  for  their  honesty  in  treat- 
ing with  the  Indians.  It  was  not  honesty  at  all.  It  was 
simply  craft  and  business  cunning.  The  Dutch  bought 
Manhattan  Island  from  the  Indians  for  about  what  is 
called  twenty-eight  dollars  worth  of  cheap  tinsel  and 
jewelry.  The  Indian  had  not  the  slightest  idea  of  busi- 
ness. Neither  Indian  ethics  nor  Indian  society  had  de- 
veloped to  that  stage.  The  gewgaws  carried  the  same 
sort  of  confusion  to  the  Indian  mind  that  the  money 
juggle  carries  to  the  mind  of  the  ordinary  white  gentile 
to-day. 

We  are  told  that  the  honest  Dutch  trader  bought  fur 
pelts  from  the  Indians  by  weight.  The  Dutchman  used 
two  beamscales  in  his  business,  a  hand  scale  and  a  foot 
scale.  In  using  the  hand  scale,  the  Indian's  bundle  of 
furs  was  placed  into  one  pan  and  the  Dutchman's  hand 
into  the  other.  When  the  scales  balanced,  the  Indian's 
furs  were  said  to  weigh  and  were  acquitted  for  as  one 
pound.  The  foot  scales  were  used  in  the  larger  tran- 
sactions. The  Indian's  load  of  furs  was  placed  in  the 
one  pan  of  the  scale  and  the  standing  Dutchman's  foot 
in  the  other,  and  when  these  scales  balanced,  the  load 
of  furs  was  said  to  amount  to  four  pounds,  and  was  ac- 
quitted for  accordingly.     None  of  these  Dutchmen  wore 


146  WHY  THE  CAPITALIST? 

lightweights.  All  payments  were  made  in  store  goods. 
The  Indian  never  knew  how  much  the  measure  of  the 
value  in  any  of  his  furs  was.  The  measure  of  their  ulti- 
mate value  was  arrived  at  when  the  furs  were  sold  to 
th.e  final  consumer.  But  the  Indian  was  none  the  less 
robbed  at  the  point  of  production.  As  another  illustra- 
tion: Johnny  said  to  Jimmy,  "Let's  play  Sunday 
school."  Jimmy  said,  "All  right,  How  do  you  play  it?" 
Says  Johnny,  "You  give  me  ten  cents  every  Sunday  and 
when  Christmas  comes  around  I  will  give  you  a  pound 
of  Sunady  school  candy."  Jimmy  does  not  know  what 
the  candy  is  worth,  measured  in  money  terms.  The 
change  from  one  medium  of  stating  the  measure  of  value 
to  another  medium  produces  confusion  in  Jimmy's  mind. 
He  falls  in  and  is  robbed  at  the  times  when  he  is  handing 
his  dimes  over  to  Johnny  at  the  rate  of  about  2600  per 
cent. 

All  of  the  value  that  the  worker  produces  in  payment 
for  his  livelihood  is  taken  from  him  by  the  morgan  as 
fast  as  it  is  produced.  Based  upon  the  fixation  of  the 
amount  of  that  value  by  the  price  the  goods  containing 
it  are  subsequently  sold  for,  the  worker  receives  back 
a  small  fraction  of  the  value  he  produces,  done  up  in  a 
form  called  money.  That  money  just  as  completely  and 
effectually  disguises  the  volume  of  the  value  it  is  the 
means  of  giving  back,  as  did  the  glass  beads  disguise  the 
amount  of  value  that  the  Dutch  trader  gave  to  the  In- 
dian, and  as  did  the  pound  of  Sunday  school  candy  dis- 
guise the  value  that  Johnny  palmed  off  onto  Jimmy. 

Like  the  Indian  hunter  and  like  Jimmy,  the  worker  is 
exploited  in  the  handing  over  of  the  value  to  the  mor- 
gan as  he  produces  it  in  the  expenditure  of  his  labor 
power. 


CHAPTER  XIII. 
AN  ANALYSIS  OF  WAGES. 

The  word  "wages"  is  most  confusing.  The  morgan 
with  the  aid  of  his  pseudo  political-economists,  has  im- 
pressed the  designation  "wages"  upon  the  living  allow- 
ance purchased  by  the  gentile  of  the  first  order  in  the 
manner  already  described  in  the  preceding  chapter.  This 
allowance  consists  in  part  of  a  fraction  of  the  portion  of 
the  free  goods  of  nature  that  this  gentile  is  entitled  to 
before  he  performs  any  labor  whatever,  and  in  part  of  a 
fraction  of  the  value  that  he  produces  by  the  expendi- 
ture of  his  labor  power. 

It  would  hardly  be  worth  while,  ordinarily,  to  quarrel 
about  a  name.  But  it  has  been  persistently  postulated 
that  wages  constitute  the  agreed  price  paid  for  pur- 
chased labor.  This  proposition  cannot  be  critically  ex- 
amined and  refuted  too  often.  This  misconception  must 
be  cleared  away. 

The  proposition  is  based  upon  three  falsities.  First, 
it  assumes  the  existence  of  a  contract  when  there  is  no 
contract  and  cannot  be  any  contract.  Secondly,  it  as- 
sumes that  something  is  paid  by  the  morgan  to  the  work- 
ing gentile,  which  is  untrue.  Thirdly,  it  assumes  that 
the  producing  gentile  gets  that  something  for  his  labor, 
which  is  also  untrue.  The  truth  is  that  the  gentiles 
under  coercion  give  up  to  the  morgan  all  that  the  lat- 
ter ever  possesses. 

Now  as  to  the  first  falsity :  No  pretended  contract 
relating  to  the  subject  matter  between  the  morgan  and 
the  worker  could  of  right  create  any  obligation  of  the 
worker,  for  the  simple  reason  that  such  contract  is  based 

147 


148  WHY  THE  CAPITALIST? 

entirely  upon  a  coercion  of  the  worker  by  the  morgan. 
The  worker  is  not  a  free  agent.  The  morgan  has  all  of 
the  worker's  means  of  obtaining  a  livelihood  within  his 
exclusive  control.  The  worker  perforce  must  come  to 
terms  with  the  morgan,  or  get  off  the  earth.  Any  form 
of  contract  forced  by  A  upon  B  by  reason  of  the  power 
of  A  to  shove  B  overboard  to  drown  in  the  middle  of  the 
ocean  is  unconscionable  and  of  no  effect.  It  is  no  con- 
tract. To  say  that  because  individual  instances  can  be 
cited  of  workers  who  were  successful  in  resisting  the 
morgan  and  making  their  livelihood,  is  merely  to  cite  as 
the  rule  exceptions  to  the  rule.  This  is  a  familiar  trick 
of  the  morgan.  It  can  also  be  said  with  equal  force  that 
men  thrown  overboard  to  drown  in  the  middle  of  the 
ocean  have  reached  the  shore  in  safety.  But  this  would 
not  give  a  validity  to  the  contract  forced  upon  B  by  A. 
The  great  majority  who  have  been  thrown  overboard  in 
that  way  were  drowned,  and  by  far  the  greater  major- 
ity of  workers  are  unable  to  save  themselves  and  fami- 
lies from  starvation,  or  pauperization,  or  from  great  suf- 
fering, all  of  wrhich  are  equally  effective  to  make  the 
contract  unconscionable  and  void,  and  not  worth  any 
consideration  whatsoever. 

Though  the  morgan  can  drive  the  worker  even  to 
death,  the  exercise  of  a  much  less  power  is  sufficient  to 
render  all  claims  under  contracts  obtained  under  such 
conditions  invalid  because  unconscionable.  If  it  is  within 
his  power  to  drive  the  worker  into  a  situation  endanger- 
ing his  life  or  his  health  or  that  of  his  wife  or  children, 
or  subjecting  him  or  his  wife  or  children  to  danger  of 
much  privation  and  suffering,  or  even  if  by  reason  of 
his  power  and  position  he  can  drive  the  worker  into  a 
fear  that  any  of  these  evils  are  likely  to  occur  if  he  does 
not  subject  himself  to  the  will  of  the  morgan,  then  the 
morgan's  claim  of  any  contract  expressed  or  implied  en- 


AN  ANALYSIS  OF  WAGES  1  i'J 

tered  into  by  the  worker  or  imputed  to  him,  is  uncon- 
scionable, and  gives  no  right  justly  enforceable  in  favor 
of  the  morgan  against  the  worker.  A  contract  cannot 
be  one-sided.  If  the  worker  is  not  under  a  contract  then 
there  is  no  contract  resting  upon  the  morgan  either. 

As  to  the  second  falsity :  To  say  that  anything  vouch- 
safed to  the  worker  is  paid,  would  be  to  assume  neces- 
sarily that  there  was  a  contract  or  a  contractual  obliga- 
tion to  pay.  If  we  therefore  say  that  when  the  morgan 
takes  from  the  worker  all  that  is  produced  by  the  latter, 
there  is  a  contract  to  pay,  the  obligation  must  be  to  pay 
back  all  that  was  taken.  There  cannot  be  any  assump- 
tion that  it  was  to  be  anything  less,  for  that  would  be  to 
assume  that  the  worker  had  become  obligated  to  give  all 
the  surplus  to  the  morgan,  for  which  assumption  there  is 
no  basis.  The  implied  obligation  of  the  morgan  therefore 
would  not  be  satisfied  by  only  paying  a  part  of  it  back. 
The  retaining  of  any  part  by  the  morgan  is  without  con- 
sideration. The  claim  of  rightfulness  in  retaining  such 
part  on  the  basis  of  a  contract  is  invalid.  Such  a  con- 
tract is  a  nudum  pactum  or  baseless  obligation.  There  is 
no  mutuality  of  obligation;  it  is  entirely  one-sided.  The 
morgan  is  simply  exacting  a  gratuity.  Take  the  case  of 
a  plain  unvarnished  highwayman,  who  robs  a  traveler  of 
a  hundred  dollars  on  the  highway.  If  this  gentleman  of 
the  road  should  throw  a  dollar  back  to  his  victim  could 
that  be  called  a  payment? 

The  essential  fact  is  that  the  morgan  does  not  pay  or 
give  the  worker  anything.  The  truth  is  quite  the  reverse. 
The  worker  gives  the  morgan  everything  of  value  that 
he  the  morgan,  as  a  morgan,  ever  possesses.  The 
worker  produces.  The  morgan  takes,  and  then  returns 
a  modicum  to  the  worker. 

Suppose  I  erected  a  toll  gate  and  made  every  passer-by 
hand  over  to  me  three-fourths  of  what  he  has  with  him 


150  WHY  THE  CAPITALIST? 

before  he  can  pass  on  the  road.  Would  I  be  paying  him 
the  one-fourth  that  he  retains?  What  if  he  is  grateful 
to  me  for  not  taking  all,  or  admits  anything  you  choose 
to  prate  or  preach  to  him  on  the  subject  of  honest  thiev- 
ery? What  if  he  has  been  fooled  into  some  belief  by  false 
prophets,  preachers  and  teachers?  In  what  way  would 
the  case  be  different  if  I  added  some  rigmarole  procedure, 
made  him  unload  his  all  into  my  crib,  and  then  measured 
out  to  him  one-quarter?  Or  further,  if  you  please,  what 
difference  would  it  make  if — instead  of  measuring  out  to 
him  the  one-quarter,  I  gave  him  certain  pieces  of  metal 
with  figures  and  pictures  on  them  and  gave  a  set  of 
names  to  these  pieces  of  metal,  told  him  that  they  consti- 
tute a  more  convenient  medium  of  exchange,  that  other 
persons  would  take  them  in  exchange  for  other  things? 
What  if  I  add  to  the  confusion  of  thought  by  adding  to 
these  pieces  of  metal  the  generic  name  of  "money"? 
The  nature  of  the  transaction  is  always  the  same,  and 
no  matter  how  many  times  I  juggle  the  issue,  it  will 
always  remain  the  same.  My  "brain"  work  will  only 
have  one  purpose  and  that  is  to  befuddle  and  deceive. 

To  sidetrack  on  to  a  claim  that  the  morgan  as  tollgate 
owner  is  gathering  his  harvest  for  upkeeping  the  road  is 
not  to  the  point  now  before  us.  If,  however,  the  thought 
cannot  be  separated  from  what  I  am  now  treating  on,  let 
us  bear  in  mind  that  the  keeping  up  of  the  road  is  used 
only  as  a  means  to  an  end, — that  end  is  to  exact  the  tribute. 

It  is  incontrovertable  that  the  morgan  pays  the  worker 
nothing  whatever.  The  case  is  quite  the  reverse.  To  say 
that  the  worker  pays  the  morgan  would  be  putting  it 
too  mildly,  and  would  be  falling  short  of  the  truth  of  the 
transaction.  The  morgan,  as  such,  renders  no  service  at 
all  and  gives  nothing  entitling  him  to  take  any  of  that 
which  he  does  take.  In  other  words,  neither  his  brain 
nor  the  thing  he  calls  capital  does  anything.     It  does 


AN  ANALYSIS  OF  WAGES  151 

not  help  or  participate  in  the  production  of  anything,  and 
it  is  not  entitled  to  any  compensation  or  to  participate 
in  any  division. 

The  worker  does  not  pay.  He  is  held  up.  He  simply 
stands  and  delivers  everything  he  has  to  the  morgan. 
His  pockets  are  turned  inside  out,  and  he  gratefully  re- 
ceives back  from  the  morgan  a  niggardly  allowance  to 
prolong  his  life  and  propagate  his  species. 

I  have  now  to  consider  the  third  false  proposition  of 
the  morgan's  pseudo-economists,  namely,  that  the  allow- 
ance called  wages  is  received  by  the  worker  for  his  labor. 
This  also  is  as  far  from  the  truth  as  any  claim  can  well 
be.  They  prate  wisely  of  labor  being  a  commodity 
thrown  upon  the  market  for  sale,  and  that  it  is  subject 
to  the  same  rules  of  barter  and  sale  that  other  commod- 
ities are  subject  to.  They  put  it  upon  the  same  footing 
with  pork  and  whiskey.  A  greater  absurdity  has  never 
been  uttered.  Here,  too,  the  self-sufficient  complacency 
with  which  they  view  this  eccentricity  of  their  minds  is 
astonishing. 

When  the  morgan  buys  bacon  he  buys  it  by  the  pound 
and  he  pays  for  as  many  pounds  of  bacon  as  are  delivered. 
When  he  wants  to  buy  hog  meat  he  does  not  have  a 
porker  brought  to  his  house  or  workshop  at  seven  o'clock 
in  the  morning  and  driven  around  the  yard  or  shop  until 
six  o'clock  in  the  evening,  then  open  the  gate  and  let 
the  creature  go.  That,  however,  is  the  nature  of  the 
transaction  when  he  claims  to  buy  labor.  The  difference 
is  that  the  living  porker's  presence  and  the  right  to  drive 
the  porker  around  cannot  be  made  to  produce  surplus 
value.  When  the  morgan  "buys  labor"  he  has  the  worker 
to  come  around  and  obey  orders.  He  may  have  the 
worker  to  walk  around  and  grunt  like  the  porker  if  he 
wants  to,  or  he  may  have  him  sit  quiet  all  day,  with  his 
hands  in  his  lap.     Now  suppose  the  morgan  does  that — 


152  WHY  THE  CAPITALIST? 

and  sometimes  on  rare  ocasions  he  does, — where  is  the 
labor  that  was  bought?  It  is  not.  It  cannot  be  said 
that  it  was  wasted.  That  would  be  a  misuse  of  terms. 
You  cannot  waste  that  which  does  not  exist.  A  hard 
pressed  morgan  economist  perhaps  will  assert  that  it 
was  a  waste  of  opportunity.  That  would  be  assuming 
that  there  was  an  opportunity,  which  would  be  unwar- 
ranted. He  was  brought  around  to  subject  himself  to 
the  will  of  the  morgan  and  the  morgan  in  the  assumed 
case  chooses  to  keep  him  in  idleness.  The  morgan  has 
had  all  that  he  bought.  In  such  a  case  he  will  have 
bought  the  gentile's  labor  time  and  the  sum  paid  for  it 
will  have  come  out  of  the  morgan's  pile,  and  not  out  of 
any  value  that  was  produced  by  the  expenditure  of  the 
gentile's  labor  power. 

Now  the  morgan,  in  the  case  cited,  got  all  he  bought. 
He  buys  the  porker  for  his  meat  and  does  not  care  a  fig 
for  his  life.  What  he  claims  and  gets  of  the  worker  is 
the  latter's  power  to  work,  his  labor  power,  his  mind, 
his  ability,  his  loyalty,  his  skill  and  the  cunning  of  his 
hand,  all  that  goes  to  make  up  his  life.  The  morgan 
cares  nothing  for  the  flesh  and  bones  of  the  worker,  except 
incidentally  as  it  affects  his  power  to  work  effectively. 

The  morgan  takes  the  worker's  labor  power,  i.  e.,  his 
life,  for  a  term.  The  transaction  has  a  well  defined  pur- 
pose; that  purpose  is  to  have  work  done  that  produces 
surplus  value. 

Does  the  man  in  prison  sell  his  labor  power  to  his 
jailor  for  his  rations?  The  labor  power  of  this  man  in 
prison  is  consumed  just  as  much  during  his  incarcera- 
tion, though  he  produces  nothing,  and  he  gets  his  dole  to 
keep  body  and  life  together.  The  morgan  never,  and 
nobody  else  ever,  buys  labor.  They  never  buy  anything 
not  is  existence.  A  contract  might  be  made  to  buy  some 
non-existing  thing,  but  that  only  amounts  to  mutual  prom- 


AN  ANALYSIS  OF  WAGES  153 

ises,  A  to  buy  and  B  to  sell  at  a  future  time;  but  there  is 
not  and  cannot  be  a  sale  until  the  thing  sold  is  in  exist- 
ence. No  labor  ever  existed  at  the  time  it  was  "bought." 
No  labor  ever  existed  at  the  beginning  of  the  day's  work. 
No  labor  ever  existed  at  any  time  during  a  day's  work. 
No  labor  ever  existed  at  the  close  of  a  day's  work.  No 
labor  ever  existed  at  the  time  it  was  "paid"  for.  The 
trouble  with  the  morgan's  pseudo-economists  is  that  in 
asserting  that  labor  is  a  commodity  they  have — unwit- 
tingly, I  may  admit — slipped  into  fiction.  The  use  of 
fiction  has  led  them  into  absurdities  and  confusions;  and, 
as  invariably  occurs,  in  considering  the  affairs  of  the 
morgan  with  the  worker,  the  pseudo-economists  always 
turn  the  absurdities  and  confusions  of  thought  to  account 
against  the  worker.  It's  a  case  of  "presto,  there  you  are, 
it's  as  clear  as  mud,  and  you  are  out." 

The  morgan  who  claims  that  he  is  buying  labor,  like 
the  morgan  who  claims  that  he  is  buying  love  is  simply 
drunk  with  arrogance.  He  and  his  pseudo-economists 
are  concealing  the  truth  of  the  transaction,  whether  in- 
tentionally or  not.  In  the  one  case  as  in  the  other,  he  is 
simply  buying  a  slave.  He  is  buying  a  human  life  for  a 
period  of  time.  Whether  the  period  is  long  or  short, 
measured  by  the  clock,  the  calendar  or  his  own  life,  does 
not  make  any  difference  as  to  the  principle. 

In  his  arrogance  the  morgan  often  makes  loud  charges 
that  he  is  not  getting  all  that  he  bought.  He  does  not 
want  any  pound  of  human  flesh  cut  from  the  quivering 
body,  for  he  cannot  make  it  work  in  that  form,  and  under 
present  conventional  ethics  he  is  more  used  to  eating 
pork.  What  he  wants  and  what  he  gets  by  the  transac- 
tion, miscalled  purchase  of  labor,  is  the  laborer's  life,  the 
living,  throbbing,  working  life,  the  life  that  produces 
surplus  value. 


CHAPTER  XIV. 
THE  MEASURE  OF  WAGES. 

"A  rose  by  any  other  name  would  smell  as  sweet." 
But  though  man  had  for  an  eternity  claimed  for  the  rose 
the  attributes  of  bread  and  meat,  the  rose  would  still 
remain  as  unsubstantial  as  an  article  of  nourishment. 
No  one  could  ever  successfully  present  a  rose  to  an  ox 
as  an  article  of  food.  The  ox  would  never  accept  it  in 
lieu  of  a  bale  of  hay.  But  the  human  mind  with  all  its 
superiority  and  advantages  over  that  of  the  lower  ani- 
mals, has  its  relative  weaknesses.  That  property  of  the 
human  mind  which  in  many  other  respects  is  a  source 
of  strength  is  also  in  some  respects  a  cause  of  weakness. 
The  law  of  compensation  holds  good.  The  human  mind 
has  a  greater  proneness  to  yield  to  the  power  of  sugges* 
tion  than  we  are  ordinarily  willing  to  admit.  In  truth  that 
power  is  to  some  minds  well  nigh  irresistible. 

Under  the  influence  of  suggestion,  not  the  least  of  it 
contained  in  human  language,  man  has  assumed  that  a3 
a  matter  of  course  and  without  question  the  idea  of  wages 
is  identical  with  the  principal  of  reward.  Nothing  was 
ever  farther  from  the  truth.  Would  any  one  consider 
the  stale  bread  and  water  thrown  to  a  prisoner  locked 
within  stone  walls  and  steel  bars  a  reward  for  not  bat- 
tering his  brains  out  against  the  steel  bars?  Even  if,  by 
the  power  of  constant  suggestion,  you  should  succeed 
in  making  the  prisoner  believe  that  his  proper  place  is  in 
prison;  that  restraint  is  a  joy;  that  he  is  happier  there 
than  he  could  be  anywhere  else;  that  the  tyrant  who  had 
him  thrown  into  prison  is  a  most  kind  and  loving  friend ; 
that  his  incarceration  was  only  for  his  own  best  interest ; 

154 


THE  MEASURE  OF  WAGES  155 

that  the  jailor  is  a  guardian  angel  and  the  turnkey  also; 
that  it  would  be  wicked  and  sinful  to  find  fault  with  his 
fare  or  his  lodging,  or  to  steal  an  extra  piece  of  bread 
whilst  the  guard  was  not  looking,  and  that  it  would  be 
a  mortal  sin  to  kill  the  guard  or  jailor,  no  matter  how  insult- 
ing or  cruel  they  might  be;  that  it  would  be  a  sin  to 
covet  anything  the  guard  or  the  jailer  or  the  despot  had, 
and  if  you  made  him  believe  his  cell  a  palace,  the  afflu- 
vium  of  it  the  perfume  of  never  fading  roses,  the  stale 
bread,  ambrosia,  the  foul  drinking  water  a  nectar;  could 
anyone,  notwithstanding  the  subjective  and  befuddled 
condition  of  the  prisoner  and  the  phantasmagoria  obsess- 
ing his  mind,  could  anyone  say  that  the  stale  bread  and 
water  thrust  into  this  prisoner's  cell  to  keep  him  alive 
constitute  a  reward?  If  this  daily  ration  is  not  a  reward 
what  is  it  then?  It  has  all  of  the  essentials  and  elements 
of  that  which  is  called  wages.  It  is  enough  to  keep  the 
prisoner  a  prisoner.  With  less  he  would  cease  to  be  a 
prisoner.  He  would  become  desperate  and  make  his 
escape  by  breaking  the  walls  or  the  bars  or  picking  the 
lock  or  by  killing  the  guard  or  jailer;  or  he  would  commit 
suicide  or  die  of  starvation  or  disease  resulting  directly 
or  indirctly  from  lack  of  nourishmnt.  At  all  events,  he 
would  cease  being  a  prisoner. 

The  allowance  thrown  to  the  common  prisoner  is 
measured  by  the  amount  required  to  keep  him  alive  in 
the  place  where  he  is  incarcerated.  It  is  the  amount 
needed  to  support  him  in  his  station  in  life.  This  is 
exactly  the  measure  of  the  worker's  wages. 

A  large  portion  of  the  dole  called  wages  already  be- 
longs to  the  worker,  without  his  doing  any  work  for  it. 
This  is  the  case  with  all  expropriated  mankind,  whom  I 
have  called  the  gentiles.  The  birds  of  the  air,  the  horse, 
the  ox,  the  antelope,  the  hare,  the  bear,  the  cat  in  the 
wilds,  the  fish  in  the  sea,  all  have  their  allowance  with- 


156  WHY  THE  CAPITALIST? 

out  paying.  They  do  not  work  for  what  they  get,  any 
more  than  simply  to  take  it.  Nature  supplies  all.  The 
creatures  in  the  wilds  pay  no  rent,  interest  or  profits  to 
anyone.  Theirs  is  the  state  of  nature  and  not  that  of  the 
morgan.  What  they  consume  is  all  free  goods.  Now, 
nature  is  not  a  whit  less  generous  to  man  than  it  is  to 
the  antelope  or  the  fish  or  any  of  its  other  creatures.  For 
man  her  goods  are  also  free,  and  nowhere  can  be  found 
the  slightest  warrant  or  justification  for  saying  that  this 
is  less  so  because  a  part  of  mankind,  by  its  work,  supple- 
ments the  work  of  nature  in  the  production  of  useful 
things.  It  is  clear  that  every  man  is  entitled  to  all  that 
his  work  produces.  But  this  does  not  mean  that  he  can 
rightfully  be  clubbed  away  from  his  share  of  that  which 
he  did  not  produce  but  which  nature  produced  for  him 
without  his  conscious  assistance.  The  affirmation  of  the 
first  stated  right  does  not  mean  and  cannot  legitimately 
be  twisted  ino  meaning  a  negation  of  the  other  and  earlier 
right.  The  preposterous  argument  of  the  morgan  and 
his  sycophants  deducible  from  the  wage  system,  in  re- 
spect to  the  disposition  of  nature's  free  goods,  is  that 
because  the  worker  applies  himself  to  supplement  the 
work  of  nature  to  increase  and  accelerate  production,  it  is 
perfectly  legitimate  and  ethical  to  rob  him  of  his  birthright. 
All  that  I  have  said  about  the  free  goods  of  nature 
applies  with  equal  force  to  the  benefits  and  advantages 
that  result  from  that  vast  accumulation  of  science  and 
education  that  comes  down  from  the  common  ancestors 
of  modern  man,  beginning  with  the  first  applicaion  to 
work,  study,  observation  and  experimentation,  and 
which  the  worker,  as  gentile  of  the  first  order,  in  common 
with  the  rest  of  the  gentiles,  is  denied  the  right  to  avail 
himself  of  for  his  own  benefit,  because  the  material  and  the 
implements  upon  which  and  with  which  to  do  so  have  all 
become  the  private  property  of  the  morgan. 


THE  MEASURE  OF   WAGES  151 

The  common  heritage  has  been  taken  from  the  gentile 
by  means  of  false  morals  and  false  laws.  The  morgan 
claims  it  as  his  private  property.  He  maintains  this 
claim  by  means  of  his  church  and  his  state,  the  church 
keeping  the  gentile  in  ignorance  of  his  disinheritance  and 
the  state  clubbing  him  away  from  the  morgan's  afore- 
said private  property.  Then,  as  if  to  cap  it  all,  the  mor- 
gan mocks  the  gentiles  by  telling  them  through  his 
mouthpieces,  that  it  is  their  church  and  their  state.  He 
feels  secure  in  the  belief  that  perverted  history  will  always 
be  able  to  support  his  pretensions  and  that  the  gentile 
mind  will  never  be  permitted  to  understand  that  controll- 
ing and  owning  is  in  effect  the  same  thing.  What  a  beau- 
tiful dunce  cap  the  gentile  is  wearing!  It  is  not  neces- 
sary to  assert  that  the  morgan  was  ever  actuated  by  any 
design  to  bring  about  such  a  state  of  affairs  or  that  he 
understands  all  or  any  of  the  detail  workings  of  his  church, 
state  and  society.  It  might  even  be  conceded  that  he 
never  designed,  or  intended  and  never  knew  and  does  not 
know  or  understand.  His  economic  interests  work  that 
way  and  determine  the  trend  and  direction.  That  is 
quite  sufficient. 

The  wage  worker  has  been  so  much  impressed  with  a 
sense  of  justness  and  righteousness  of  the  laws  and  the 
ethics  of  his  country  and  of  the  society  that  has  been 
imposed  upon  him,  the  moral  rules  and  precepts  preached 
at  him  and  taught  to  him,  that  he  keeps  well  within  the 
line  of  those  laws  and  those  moral  rules  and  precepts, 
however  false  and  misleading  they  be.  It  does  not  make 
a  particle  of  difference  whether  this  is  because  of  a 
pure  devotion  or  because  of  a  fear  of  untoward  conse- 
quences following  any  transgression  of  those  laws  and 
precepts.  The  effect  is  the  same  whether  he  fears  the 
lash  of  the  law,  or  shrinks  from  the  thought  of  ignominy. 
Nor  does  it  make  a  particle  of  diil'erencc  if  the  effect  on 


158  WHY  THE  CAPITALIST? 

his  conduct  be  produced  by  an  active  and  over-tender 
conscience,  the  congeries  of  sense  and  folly  of  his  time, 
station  and  country.  The  schools,  the  churches,  the 
press  and  the  politicians,  ever  subservient  to  the  morgan, 
all  of  them,  are  constantly  doing  all  within  their  power 
to  keep  this  conscience  alive  and  tender. 

The  great  mass  of  workers  are  workers  as  a  result  of 
compulsion,  legal  or  moral.  They  are  prisoners  of  toil, 
fully  as  much  as  the  prisoner  within  stone  walls  and 
steel  bars.  That  here  and  there  a  worker,  finding  him- 
self ground  down  to  the  very  point  of  despair  and  doubt 
as  to  whether  his  existence  is  worth  while  or  not,  throws 
all  scruples  to  the  wind  and  with  that  temporary  extraor- 
dinary and  almost  superhuman  strength  and  daring  that 
sometimes  come  from  sheer  desperation,  fights  his  way 
into  another  order  or  class,  does  not  prove  anything  to 
the  contrary.  It,  in  fact,  helps  to  make  the  rule  so  much 
stronger.  For  every  time  a  worker  breaks  from  the 
prison,  the  walls  and  bars  are  made  stronger  and  more 
unbreakable  for  the  others  still  in  wage-bondage. 

Where  thievery  is  the  game,  the  man  that  does  not 
understand  the  game  or  because  of  scruples  refuses  to 
play  it,  must  give  way,  and  he  is  written  down  a  fool, 
an  incompetent  and  unfortunate.  The  man  that  plays 
at  the  game,  though  of  mediocre  intelligence,  still,  by 
stolidly  playing  on,  may  acquire  a  craft  and  cunning  that 
will  answer  his  purpose,  and  may  even  acclaim  his  the 
highest  kind  of  intelligence.  According  to  the  pile  of 
chips  he  rakes  in  the  dolt  is  credited  with  superior  brains 
and  mentality. 

Man  may  be  held  a  prisoner  without  the  aid  of  stone 
walls,  steel  bars,  hand  cuffs  or  shackles.  Circumstances 
are  just  as  effective  and  require  fewer  jailors.  The  power 
to  exclude  man  from  the  things  he  must  have,  to  drive 
him  into  the  desert,  as  it  were,  makes  him  as  much  of  a 


THE  MEASURE  OF   WAGES  159 

prisoner  as  to  lock  him  up,  and  relieves  the  jailor  of  the 
feeling  of  responsibility  to  keep  the  prisoner  alive.  To 
have  the  power  of  dictating  to  him  the  terms  and  condi- 
tions upon  which  he  may  have  access  to  the  things  he 
must  have  in  order  to  live,  makes  of  him  even  more  of  a 
prisoner  than  to  throw  him  into  jail.  The  power  em- 
braces the  power  likewise  to  enslave  the  mind.  The 
empty,  seductive  and  deceptive  right  that  is  somtimes 
accorded  the  worker  to  choose  as  to  which  yoke  he  will 
bend  his  neck  under  carries  with  it  the  most  powerful  of 
false  suggestions  of  freedom  of  contract.  Would  there 
be  any  real  freedom  of  action  given  the  prisoner  by  per- 
mitting him  to  choose  which  cell  in  a  jail  he  shall  be  cast 
into  when  the  rations  and  accommodations  are  the  same 
for  all  the  cells? 

I  said  the  prisoner  in  the  cell  must  receive  enough  to 
keep  him  alive  and  meet  his  imperative  wants  in  the  posi- 
tion in  society  that  he  at  the  time  occupies,  namely,  that 
of  a  prisoner,  else  he  will  break  out  of  prison,  kill  his 
guard,  kill  himself  or  die  for  want  of  sustenance,  or  of 
such  ailments  as  lack  of  nourishment  produces  or  super- 
induces. The  wage  worker  must  have  such  an  allowance 
to  meet  his  imperative  wants  in  the  position  in  society 
that  he  likewise  occupies.  That  is,  he  must  have  enough 
to  feed,  clothe  and  shelter  himself,  his  wife  and  children 
and  supply  the  things  absolutely  necessary  to  appear  and 
keep  himself  and  family  as  members  of  society.  When- 
ever he  gets  more  than  that  in  any  branch  of  industry,  it 
will  be  because  of  a  shortage  of  the  supply  of  workers  in 
that  branch  of  work,  and  it  will  only  be  a  temporary 
advantage.  To  the  extent  that  the  allowance  to  a  worker 
in  his  line  of  work  is  greater  than  in  other  branches  of 
labor,  will  other  workers  be  attracted  to  that  kind  of 
work,  until  the  supply  meets  and  exceeds  the  demand, 
and  consequently  through  the  competition  of  those  seek- 


160  WHY  THE  CAPITALIST? 

ing  jobs,  the  allowance  will  gravitate  to  its  normal  level 
under  the  wage  system.  Furthermore,  to  the  extent  that 
that  allowance  is  greater  will  inventive  genius  be  stimu- 
lated to  divide  and  subdivide  the  work  and  to  introduce 
labor  saving  tools,  devices,  and  machines  to  render  the  work 
more  productive  and  thereby  reduce  the  demand  for  work- 
ers, thus  bringing  about  the  same  results  as  would  be 
brought  about  by  an  increase  in  the  number  of  workers 
applying  for  employment.  Thus  again  we  see  that  the 
much  extolled  "law"  of  supply  and  demand  is  entirely 
subject  to  other  forces  and  influences  and  therefore  is 
no  law  at  all.  If  the  worker  gets  less  than  he  must  have 
to  meet  his  needs,  he  will  make  extraordinary  efforts  to 
break  away  from  that  branch  of  employment,  some  suc- 
ceeding, reducing  the  supply  of  workers  in  that  line,  or 
he  will  be  unable  to  maintain  the  required  health 
strength  and  spirit,  so  lessening  the  amount  of  his  work. 
Fewer  new  workers  or  apprentices  will  seek  to  enter  that 
field  of  labor.  The  worker  in  such  lines  of  employment 
will  succeed  in  raising  fewer  children,  the  young  men 
will  refrain  from  getting  married.  All  of  the  forces  and 
influences  of  repulsion  will  work  against  the  morgan's 
pressure,  called  the  "law"  of  supply  and  demand.  Thus 
the  influence  wall  be  to  reduce  the  supply  of  labor  in  the 
unfavorable  occupations,  and,  other  things  being  equal, 
the  allowance  of  the  worker  called  wages  will  resume  its 
normal  level  on  the  line  of  a  bare  living. 

The  more  abject  and  defenseless  the  worker,  and  the 
more  easily  he  can  be  replaced,  the  more  easily  will  the 
morgan  be  able  to  keep  his  allowance  down  at  the  lowest 
living  line.  This  is  not  because  of  any  "law"  of  supply 
and  demand,  but  because  the  pressure  on  the  worker  for 
self  preservation  drives  him  to  accept  terms  to  get  a  lit- 
tle of  nature's  life-giving  and  life-preserving  goods  that 


THE  MEASURE  OF  WAGES  161 

the  morgan  wields  domain  over  and  of  which  there  is  an 
abundant  supply,  both  actually  and  potentially. 

When  the  Roman  army  was  sending  into  Italy  and 
Sicily  a  continuous  stream  of  slaves,  the  morgan  drove 
his  slaves  to  work  in  the  fields  as  naked  as  they  were 
born,  fed  them  on  the  very  cheapest  of  food,  consisting 
principally  of  nuts  and  garlic,  and  often  not  sufficient  of 
that;  housed  them  in  the  most  miserable  of  hovels,  often 
corralled  them  under  the  open  sky,  without  the  sem- 
blance of  bed,  clothing  or  furniture.  If  the  slave  became 
sick,  he  was  left  to  die  without  medical  care  or  attend- 
ance. Often  the  sick  were  given  extra  beatings  for  being 
sick.  It  was  cheaper  to  get  fresh  slaves  than  to  care  for 
them.  To  house  them,  clothe  them  and  feed  them  with 
a  view  to  keeping  them  well  and  comfortable  was  too 
expensive,  from  the  point  of  view  of  the  morgan's  eco- 
nomic interest.  It  reduced  the  profit  on  the  slave's  work, 
it  cut  down  the  amount  of  surplus  value  that  the  slave 
produced.  I  was  more  profitable  to  let  the  sick  slave  die, 
and  supply  his  place  with  a  new  captive. 

Negro  slaves  in  our  southern  states  received  much 
better  treatment  because  the  supply  by  conquest  had  been 
shut  off  by  national  law,  and  it  cost  money  to  breed  and 
raise  them.  Therefore,  the  same  material  interest  which 
in  ancient  Rome  led  to  the  most  atrocious  treatment  of 
the  slaves  because  it  was  cheapest  and  most  profitable, 
led  in  our  country  to  the  exercise  of  some  care  and  solici- 
tude for  the  slave's  well  being  and  comfort.  The  "mis- 
sus" herself  would  often  sit  up  nights  as  nurse,  or  brave 
the  storm,  to  save  the  life  of  a  thousand-dollar  "nigger." 
The  negro  slave  in  the  south  received  a  sufficiency  of 
wholesome  food,  necessary  clothing  and  housing,  furni- 
ture and  household  utensils.  When  sick  he  received 
medical  care  and  attendance.    His  station  in  life  was  that 


102  WHY  THE  CAPITALIST? 

of  an  American  negro  slave,  and  his  living  was  of  that 
standard. 

When  it  comes  to  the  worker  clubbed  free,  we  have 
again  the  economic  interest  of  the  morgan  determining 
the  mental  attitude  of  the  morgan  toward  him.  It  is  not 
of  the  slightest  material  interest  to  the  morgan  whether 
the  worker  is  sufficiently  fed,  clothed  or  housed,  or 
whether  he  is  in  good  physical  health,  or  whether  his 
limbs  or  body  are  torn  and  broken  or  not,  so  long  as  he 
works  and  produces  the  requisite  surplus  value.  The 
morgan  does  not  even  honor  the  worker  by  hating  him. 
He  hates  only  the  agitator  and  him  only  because  he 
threatens  his  riches  and  his  regime.  With  the  morgan, 
aggrandisement  is  a  callous  fanaticism,  a  sheer  indiffer- 
ence to  humane  pretences.  All  the  morgan  wants  of  the 
worker  are  long  and  productive  work  days,  with  the 
lowest  possible  amount  allowed  the  worker  as  wages. 

That  which  is  called  wages  is  not  compensation  for 
labor  or  for  labor  power  expended.  It  is  merely  a  dole 
of  nature's  free  goods  and  of  the  value  created  and  per- 
force allowed  the  worker  for  his  upkeep.  It  is  to  get  his 
labor  power  at  the  bare  cost  of  its  production.  It  is  not 
based  upon  contract.  It  is  pretended  to  be  based  on 
contract.  But  the  claim  is  as  false  as  false  can  be.  The 
whole  wage  system  rests  entirely  upon  force  and  fraud. 
The  forms  and  formalities  of  contract  are  nothing  but 
forms  and  deceiving  formalities.  This  dole,  called  wages, 
is  measured  and  estimated  by  the  same  standard  that  the 
daily  rations  given  the  prisoner  in  jail  is  measured  and 
estimated  by.  The  question  never  is:  How  much  did 
the  worker  produce?  It  always  is:  How  much  must  be 
given  him  to  live  on,  of  the  coarsest  and  commonest  that 
will  maintain  him  as  a  worker?  That  is  all  he  is  worth, 
that  is  all  he  can  get,  that  is  what  you  can  get  him  for  in, 
the  open  market  where  he  is  compelled  to  compete  for  a 


THE  MEASURE  OF   WAGES  1G3 

living,  because  he  has  been  barred  out  from  his  heritage. 

Custcfm  sets  the  standard  of  morality.  Therefore  the 
living  dole  the  wage  worker  gets  is  called  the  fair  wage. 
The  amount  the  worker  needs  is  made  the  bone  of  con- 
tention, the  subject  of  many  long  and  learned  disquisi- 
tions as  to  how  many  ounces  of  wheat  and  how  maiiyr 
ounces  of  chaff  should  slip  into  a  worker's  alimentary  canal 
to  keep  him  in  working  condition. 

Reduced  to  its  final  analysis,  the  wages  of  the  wage 
worker,  the  allowance  of  the  chattel  slave  and  the  rations 
of  the  prisoner  in  jail,  are  all  measured  according  to  the 
same  principle  and  standard. 


CHAPTER  XV. 
THE  STRUGGLE  OVER  WAGES. 

I  stated  that  the  amount  that  must  naturally  be  al- 
lowed to  the  worker  is  measured  by  the  amount  that  he 
needs  to  live,  replenish  his  labor  power  and  reproduce 
his  kind.  Of  course,  I  am  speaking  of  the  average 
worker  in  each  calling.  This  amount  varies  with  the 
different  occupations  and  it  varies  with  locality  and  also 
with  time.  If  there  were  no  change  in  the  needs  of  the 
worker  or  the  rapacity  of  the  morgan  the  state  of  con- 
stant industrial  war  or  preparation  for  war  that  we 
witness  would  not  be.  The  amount  of  the  allowance 
would  gravitate  to  its  normal  level  and  remain  there. 

One  of  the  secret  and  potential  causes,  even  if  a  re- 
mote cause,  of  the  struggle  over  the  amount  of  the  allow- 
ance is  the  school  house.  The  lower  the  degree  of  the 
worker's  education,  the  less  he  needs  to  live  upon,  the 
less  leisure  he  needs  to  give  to  social  duties,  studies,  re- 
flections or  recreation,  in  a  word,  the  more  hours  he  can 
work  in  a  day.  The  illiterate  worker  does  not  want 
newspapers,  or  books  or  anything  they  suggest  or  create 
a  longing  for,  either  for  himself  or  family.  The  coarsest 
clothing  will  do  for  him  because  he  does  not  know  of 
anything  better.  The  most  uncomfortable  and  unsani- 
tary house  satisfies  him,  first,  because  he  does  not  know 
anything  better  for  himself,  because  he  is  there  during  a 
very  small  part  of  his  time  outside  of  his  sleeping  time — 
for  he  works  many  hours  a  day.  The  only  entertainment 
he  craves  is  that  of  the  saloon.  His  life  is  a  humdrum 
of  toil.  There  is  an  absence  of  anything  attractive  or 
refining  in  his  home.    His  lack  of  education  prevents  him 

1&4 


THE  STRUGGLE  OVER  WAGES  165 

from  enjoying  anything  better  even  if  it  were  offered 
him.  The  craving  for  as  much  of  a  contrast  as  can  be 
gotten  and  gotten  quickly,  away  from  his  drudgery, 
proves  him  still  very  much  of  a  human  being.  There  is 
but  one  course  for  him,  and  that  leads  to  the  saloon. 
There  he  spends  of  that  which  he  and  his  family  need 
so  sorely  to  purchase  that  which  he  needs  most,  namely, 
a  sharp  contrast  and  complete  diversion  of  mind.  His 
very  beastliness  proves  that  he  feels  the  need  of  better 
conditions. 

With  the  school  house  there  gradually  comes  a  trans- 
formation. The  worker  begins  to  read.  And  from  the 
never-ceasing  torrent  of  scandal  and  sensationalism  there 
adheres  to  his  skin  now  and  then  small  particles  of  new 
things.     His  appetite  for  them  increases. 

The  hopes  and  aspirations  of  the  worker  to  achieve 
a  better  and  higher  life  for  himself  and  family  are  seized 
upon  by  the  morgan  and  utilized  as  an  additional  instru- 
ment by  which  to  goad  the  worker  on  to  still  greater 
efforts  and  a  greater  productiveness  of  value  which  swells 
still  further  the  volume  of  surplus  values.  The  morgan's 
agent  comes  around  with  linoleum  for  the  kitchen  floor. 
Consideration  for  self  and  family  move  the  worker  to 
pinch  a  little  and  buy  linoleum.  The  agent  also  has  rugs 
and  carpets.  In  time  these  things  are  gotten  in  the  same 
way.  Now  these  things  are  all  made  in  the  morgan's 
factory,  and  as  the  morgan  likes  to  rake  in  large  quanti- 
ties of  surplus  value,  he,  or  his  sales  agent,  has  many 
clever  arguments  and  persuasions  to  put  forth  to  the 
worker  to  buy,  to  beautify  his  home  and  to  make  it  more 
comfortable  for  his  wife  and  children  and  a  little  more 
attractive  for  himself. 

The  morgan's  factory  also  turns  out  window  shades 
and  lace  curtains,  and  chromoes  in  large  quantities.  All 
of  these  goods  the  morgan  pushes  the  sale  of.     It  is 


16G  WHY  THE  CAPITALIST? 

business.  The  worker  who  does  not  buy  them  is  ashamed 
to  meet  the  worker  that  does  buy  them.  The  morgan's 
business  booms.  These  things  become  a  necessity.  They 
become  as  necessary  as  bread.  Great  streams  of  additional 
surplus  value  flow  into  the  coffers  of  the  morgan  as  a  result 
of  the  manufacture  and  sale  of  these  new  necessaries  of 
life.  Good  business  is  the  result  and  great  prosperity — but 
not  for  the  worker. 

By  the  operation  of  natural  law,  like  the  law  of  gravi- 
tation, all  of  the  additional  wealth  and  prosperity  flows 
into  the  capacious  receptacle  of  the  morgan.  The  law 
that  measures  the  prisoner's  rations  also  measures  the 
worker's  allowance.  It  is  a  hard  law,  and  like  hardened 
arteries  stubbornly  resists  the  flow  of  any  greater  volume 
to  the  worker  to  meet  his  new  and  imperative  wants. 
The  worker  demands  a  readjustment,  claims  he  does  not 
get  enough  to  live  on.  The  morgan  is  incensed  and  in- 
dignant at  the  insolence  of  asking  for  more.  The  rupture 
leads  to  a  strike.  The  morgan  is  complacent  in  his  claim 
of  being  in  the  right  and  now  charges  that  the  worker's 
trouble  comes  from  high  living.  He  scours  the  country 
for  other  workers  who  have  not  yet  the  disease  of  high 
living,  workers  whom  he  would  not  have  taken  on  before 
the  strike,  and  with  their  servile  help  he  tries  to  break 
the  strike.  Sometimes  the  striking  worker  wins,  some- 
times the  morgan  wins.  But  the  victory  of  neither  the 
morgan  nor  of  the  worker  is  ever  permanent.  The  same 
influence  keeps  still  at  work.  The  morgan  himself  con- 
tinues to  have  his  agents  push  the  things  turned  out  by 
his  mills  and  that  whet  the  appetite  for  higher  living,  and 
it  is  only  a  question  of  time  that  the  former  strike  break- 
ers are  driven  by  the  same  spur  of  necessity.  Thfey  also 
strike.  The  morgan  is  extremely  annoyed.  His  views 
on  good  citizenship  and  morals  are  dictated  by  his  cash 
account  and  his  idea  of  liberty  is  the  child  of  his  insa- 


THE  STRUGGLE  OVER  WAGES  107 

tiable  appetite  for  exploitation.  He  sincerely  thinks  the 
world  will  be  submerged  in  wickedness  if  any  limitations 
be  placed  upon  his  divine  right  of  exploitation.  The 
wreck  of  matter  and  crush  of  worlds  will  be  upon  us  if 
"our  workingmen"  be  not  held  within  the  restraints  of 
"reason."  In  such  a  holy  cause  everything  is  justifiable. 
Police,  militia,  injunctions  are  appealed  to,  and  become 
so  familiar  as  to  lose  their  terror. 

The  worker  when  the  spur  of  necessity  urges  him  to 
strike,  thinks,  if  he  does  not  say,  "to  hell  with  the  police, 
militia  and  injunctions."  In  America,  the  morgan  used 
to  send  his  agents  into  other  countries  and  bring  in 
hordes  of  illiterate  and  servile  minded,  who  did  not  know 
anything  about  even  a  separate  room  for  a  kitchen,  to 
say  nothing  of  linoleum,  rugs,  carpets,  curtains,  books 
and  newspapers.  But  the  worker  has  a  vote  and  he 
begins  the  long,  wearisome  and  painful  task  of  calling 
on  the  candidates  for  legislative  office  year  after  year, 
and  as  in  course  of  time  the  drop  of  water  wears  the 
stone,  there  emits  from  the  halls  of  legislation  with  pain- 
ful labor,  and  at  long  intervals,  statute  after  statute  on 
the  subject  of  foreign  labor,  prison  labor,  child  labor, 
female  labor,  factory  inspection,  compulsory  education, 
compensation  for  loss  of  life  or  limb,  all  of  which  the  mor- 
gan calls  vicious  class  legislation. 

The  morgan,  however,  keeps  right  on  seeking  new  in- 
vestments for  his  constantly  accumulating  pile  of  surplus 
values.  He  has  piano  factories  built  and  gives  orders 
to  push  the  sale  of  pianos.  Music  teachers  appear  in  ever 
increasing  numbers,  also  agents.  They  urge  the  worker 
to  buy  a  piano  for  his  little  daughter  and  to  let  her  take 
music  lessons.  Still  the  surplus  values  keep  on  increas- 
ing in  the  morgan's  vaults  in  geometrical  proportions  almost 
to  the  bursting. 

The  only  remedy  the  morgan  can  think  of  is  to  make 


168  WHY  THE  CAPITALIST? 

more  investments  and  still  further  increase  and  accelerate 
the  flow  of  surplus  to  his  coffers.  His  attention  is  di- 
rected to  hundreds  of  various  schemes.  He  acquires 
summer  resorts,  lake  side,  ocean  side,  mountain  side  and 
mountain  top.  He  has  new  railroads  built  to  them,  new 
steamboat  lines  and  trolley  lines,  some  near,  some  far, 
some  short,  some  long,  so  as  to  tempt  every  purse,  even 
the  leanest.  He  has  his  printing  press  to  work  night 
and  day,  spreading  the  most  seductive  inducements,  the 
most  glorious  descriptions  and  the  most  potent  reasons 
why  every  man,  woman  and  child  should  take  a  holiday, 
a  trip,  a  vacation,  just  across  the  river,  or  to  the  moun- 
tain, or  to  the  lake,  or  up  the  lake,  or  to  the  sea  shore 
or  across  the  sea.  The  morgan  backs  and  pushes  every- 
thing continuously  and  with  never  abating  zeal,  to  edu- 
cate the  taste  of  the  worker  to  need,  yes,  to  demand, 
these  things.  The  morgan  does  not  do  this  to  benefit 
or  elevate  the  worker.  Far  from  it!  He  does  it  to  get 
back  the  worker's  living  allowance.  He  does  it  to  in- 
crease and  accelerate  the  flow  of  surplus  value  to  the 
bursting  vaults  of  the  morgan. 

Incidentally  some  few  of  the  workers  get  some  benfit 
in  the  way  of  improved  health,  and  broader  education, 
this  appetite,  however,  growing  all  the  time.  In  the 
meantime,  strikes  are  increasing  in  frequency,  extent, 
effect,  destructiveness  and  bitterness.  The  morgan,  bas- 
ing his  calculations  upon  the  well  considered  probability 
of  returns  that  he  figures  he  has  a  right  to  expect,  con- 
tracts more  obligations,  plans  greater  things ;  the  pur- 
chase of  dukes  for  his  daughters,  yachts,  limousines, 
country  seats  and  miles  of  game  preserves  for  himself, 
his  sons  and  sons-in-law,  art  collections,  million  dollar 
parties,  princely  gifts  to  educational  institutions,  so- 
called,  and  libraries  and  churches  for  his  own  glorifica- 
tion.   This  is  a  chronic  state  of  things,  and  a  demand  of 


THE  STRUGGLE  OVER  WAGES  169 

the  worker  for  more,  threatening  to  impede  the  flow  or  to 
trim  off  a  noticeable  amount  of  the  surplus  value  rushing 
the  morgan's  way  is  an  annoying  experience.  In  fact,  the 
morgan  regards  it  as  wicked. 

If  we  concede  for  the  present  purposes  of  the  argu- 
ment that  the  worker  gets  more  than  formerly,  it  is  at 
once  apparent  that  this  increase  is  not  nearly  so  much  as 
is  generally  supposed.  In  the  first  place,  if  he  gets  a 
little  more  wages  the  morgan  immediately  begins  to  add 
the  amount  of  the  increase,  together  with  a  bonus,  to  the 
selling  price  of  the  commodities  produced  by  the  worker. 
The  worker  also  consumes  of  these  commodities  that  he 
produces.  Hence,  every  time  he  gets  a  little  more  to 
catch  up  with  the  cost  of  living,  that  cost  of  living  begins 
another  upward  move.  Every  branch  of  work  then  has 
the  same  experience,  and  every  worker  chafes  because 
his  allowance  is  no  longer  equal  to  the  demands  of  his 
standard  of  living.  So  every  worker  is  compelled  again 
and  again  to  demand  a  readjustment.  In  name  and  lan- 
guage he  demands  a  raise.  But  it  is  in  name  and  lan- 
guage only.  In  truth  and  in  fact,  he  is  rebelling  against 
the  shortening  of  his  rations.  As  he  gets  what  should  be 
his  allowance  in  a  makeshift  and  cheating  medium  called 
money,  an  additional  source  of  confusion  of  thought  re- 
sults. 

We  will  suppose  that  the  amount  of  necessaries  that 
one  dollar  will  purchase  is  now  less  by  ten  per  cent  than 
it  was  a  year  ago.  The  worker  because  of  this  reduction 
in  the  purchasing  power  of  the  dollar  is  certainly  getting 
less  than  formerly.  If  his  wages  must  be  kept  up  to  the 
living  line  he  must  demand  that  the  shortage  be  made 
good.  To  say  that  a  worker  receiving  ten  dollars  in 
medium  of  exchange  now,  where  he  got  ci^ht  dollars  ten 
years  ago,  is  getting  more  than  he  got  before  in  spite  of 
the  fact  that  in  the  form  of  the  ten  dollars  the  medium 


170  WHY  THE  CAPITALIST? 

of  exchange  does  not  give  him  any  more  in  substance, 
does  not  make  his  living  allowance  out  of  the  value  he 
produces,  is  nothing  but  sounding  brass.  Money  in  the 
hands  of  the  worker  is  never  anything  more  than  an 
artificial  medium  of  exchange.  To  the  worker  it  is  not 
worth  an  iota  more  than  it  will  procure  for  him  of  the 
free  goods  of  nature  and  the  value  that  he  produced 
under  the  morgan's  rule  and  now  in  the  hands  of  the 
morgan.  If  ten  dollars  will  not  buy  any  more  to-day 
than  eight  dollars  did  ten  years  ago,  then  the  worker's  liv- 
ing allowance  amounts  to  no  more  today  than  it  did  ten 
years  ago. 

So  we  see  that  the  worker,  in  order  to  keep  himself  up 
with  the  living  line,  is  compelled  to  make  frequent  de- 
mands for  readjustment  and  to  enforce  those  demands  with 
costly  and  destructive  strikes  and  labor  wars. 

If  there  were  a  scientific  medium  of  exchange,  of  a 
fixed  and  unvarying  standard  of  measurement,  it  would 
be  of  immense  service  and  avoid  much  confusion  of 
thought  and  understanding.  But  as  it  is,  we  are  harassed 
by  all  the  pestiferous  annoyances  and  filchings  bred  by 
what  in  fact  is  a  double  standard  of  value  in  one  medium, 
namely,  gold.  When  the  worker  produces  say  920  units 
of  value,  of  which  his  living  allowance  is  148  units,  he 
gets  it  in  something  the  value  of  which  it  is  as  difficult 
to  fix  down  as  the  proverbial  Irishman's  flee.  In  the 
United  States  and  most  other  countries  he  is  put  off  with 
a  haphazard  wage  expressed  in  gold.  Of  course,  I  shall 
not  spend  any  time  discussing  silver  and  paper,  as  those 
are  only  the  tokens  of  money  redeemable  in  fixed  quanti- 
ties of  gold.  The  amount  of  value  contained  in  a  given 
quantity  of  gold  fluctuates.  In  fact  that  value,  within 
the  memory  of  man,  has  constantly  been  diminishing,  as 
can  be  seen  by  the  constant  diminution  of  its  purchasing 
power.     Gold  is  brought  out  of  the  ground  by  work. 


THE  STRUGGLE  OVER  WAGES  171 

There  are  very  few  useful  purposes  that  gold  can  be  put 
to.  Filling  teeth  with  it  is  one.  It  is  used  principally 
for  ornamental  purposes,  and  in  the  form  of  coin  as  a 
medium  of  exchange.  The  cost  of  the  labor  power  ex- 
pended in  digging  it  from  the  ground,  affords  only  a 
minimum  of  the  value  demanded  in  exchange  for  it.  If 
it  had  not  been  made  the  medium  of  exchange  by  artifi- 
cial laws,  gold  would  probably  be  very  much  less  in 
fashion  now,  and  its  power  to  exchange  for  value  in  the 
form  of  useful  things  would  be  reduced  very  much  nearer 
the  cost  of  the  labor  power  consumed  in  its  production. 
Gold  has  an  artificially  created  price  imparted  to  it  be- 
cause by  virtue  of  law  it  is  a  legal  tender.  Outside  of 
buying  necessaries  of  life,  it  is  only  good  to  invest,  that 
is,  as  a  means  to  get  possession  of  something  with  which 
to  exploit  the  worker  and  rake  in  surplus  value. 

The  press  for  investment  by  the  morgan  of  all  his 
accumulated  surplus  values  is  only  intensified  by  the  ad- 
dition to  it  of  the  gold  containing  surplus  value  over  the 
cost  of  the  labor  power  consumed  in  its  production.  It 
is  of  little  importance  to  the  morgan  what  price  he  pays 
for  his  personal  needs,  for  they  are  but  few  compara- 
tively, and  the  cost  of  them  is  of  minor  consequence  to 
him.  The  prices  paid  by  the  morgan  in  the  making  of 
investments  are  also  of  minor  importance  when  it  comes 
to  acquiring  control  of  the  resources  of  nature  and  the 
means  of  production.  To  him,  complete  control  of  big 
things  is  cheap  at  almost  any  price.  He  does  not  want 
gold,  he  wants  interests,  he  wants  control  of  the  forces 
of  nature,  he  wants  the  means  by  which  he  can  draw  to 
himself  the  surplus  value  produced  by  the  worker. 
Though  he  pay  high  prices  he  makes  it  up  many  fold 
again  by  the  surplus  values  raked  in.  By  paying  high 
prices  in  money  to  gain  control  of  the  resources  of  nature 
and   the   means   of   production,   he    is    even   cheapening 


172  WHY  THE  CAPITALIST  ? 

that  very  money  by  boosting  prices  and  by  restricting 
opportunities  for  investment  of  that  money  in  profit  win- 
ning enterprises. 

The  purchasing  power  of  money  is  being  continuously 
depressed  by  the  morgan.  His  operations  on  a  gold  basis 
are  doubled  and  quadrupled  over  and  over  again,  first 
by  token  money,  secondly,  and  enormously  more,  by 
bank  balances,  clearing  house  operations,  drafts,  bills, 
notes,  etc.,  etc.  Thus  he  sets  the  pace  and  when  he 
causes  prices  to  go  up  by  the  prices  he  himself  pays,  he 
is  only  doing  that  much  to  establish  a  greater  measure 
of  the  profits  to  be  gotten  by  himself,  to  justify  as  it 
were,  the  rate  of  the  returns  on  his  investments. 

Only  one  thing  must  be  kept  down,  and  that  is  the 
cost  of  labor  power.  That  must  by  all  means  be  kept 
down  to  the  lowest  notch  of  cost.  Therein  lies  the  secret 
of  the  growth  of  surplus  values. 

I  said  that  gold  was  the  medium  of  exchange.  Per- 
haps it  would  be  more  accurate  to  say  that  gold  is  an 
artificially  created  basis  of  exchange.  Everyone  has  a 
right  to  demand  payment  in  gold,  but  no  one  does,  ex- 
cept in  settling  international  balances.  If  everyone 
demanded  payment  in  gold,  it  would  merely  result  in  a 
shuffling  back  and  forth  of  the  metal. 

Things  are  very  much  different  with  the  worker.  To 
him  money  is  a  very  much  different  sort  of  thing.  To 
him  money  is  made  to  represent  life,  and  not  mere  poker 
chips  on  a  gambler's  table.  If  the  gold  received  by  him 
in  lieu  of  his  daily  allowance  were  weighed  out  to  him  in 
accordance  with  its  daily  worth,  i.  e.,  in  accordance  with 
what  it  will  buy  from  day  to  day,  he  might,  possibly  by 
constantly  watching  the  market,  be  able  to  know  as  to 
whether  he  is  getting  all  of  his  stated  allowance  or  not. 
But  even  this  meagre  protection  is  denied  him.  He  is 
befuddled  by  another  trick  and  that  is  that  the  gold  or 


THE  STRUGGLE  OVER  WAGES  173 

the  paper  and  silver  representing  it,  with  which  he  is 
paid  is  given  another  name,  and  as  that  name  is  kept 
always  the  same,  he  is  deceived  into  assuming  that  the 
value  of  the  gold  is  stable  because  the  name  is  stable. 
The  metal  pressed  into  uniform  pieces  is  called  one,  five, 
ten  and  twenty  dollar  pieces,  respectively.  One  piece 
contains  25.8  grains  of  gold,  .9  fine,  and  is  called  a  dollar, 
another  129  grains  and  is  called  five  dollars,  another  258 
grains,  is  called  ten  dollars,  another  516  grains,  is  called 
twenty  dollars.  The  pressing  of  this  metal  into  these 
respective  pieces  is  merely  for  the  purpose  of  conven- 
ience in  handling,  like  the  pressing  of  butter  into  one 
pound  cakes,  and  is  not  intended  to  and  does  not  add  or 
detract  a  particle  of  value.  Outside  of  the  convenience 
of  handling  and  the  assurance  of  fineness  and  weight, 
these  pieces,  called  coins  of  one,  five,  ten  and  twenty 
dollars  have  no  more  value  than  in  the  form  of  nuggets. 
In  large  transshipments,  the  metal,  in  fact,  is  in  the  form 
of  bars. 

But  here  comes  the  rub.  Although  gold  has  no  sta- 
bility of  value  despite  its  being  pressed  into  coins  and 
given  a  name,  and  is  in  fact  constantly  declining  in  value 
for  purposes  of  buying  the  necessaries  of  life,  so  far  as 
palming  it  off  onto  workers,  and  only  for  that  purpose, 
it  is  regarded  and  treated  as  a  fixed,  stable  and  unvarying 
standard.  The  worker  is  compelled  by  his  condition  and 
circumstances  to  take  this  constantly  diminishing  metal 
measure,  or  its  representative,  in  lieu  of  his  living  allow- 
ance from  the  value  that  he  produces.  As  a  consequence 
he  sees  his  daily  allowance  constantly  dwindling.  He 
shifts  along  and  endures  the  loss  until  it  is  no  longer 
endurable.  Then  he  demands  a  readjustment  and  if 
necessary  again  strikes  to  enforce  his  demand.  The 
double  standard  is  worked  off"  on  him  by  the  simple 
device  of  applying  a  name  importing  fixity  and  perma- 


174  WHY  THE  CAPITALIST? 

nence  to  a  thing  that  is  constantly  declining  in  its  pur- 
chasing power.  Then  he  is  charged  with  being  the  dis- 
turber of  the  equilibrium  whenever  nature  rebels. 

Even  the  worker  cannot  live  upon  bread  alone.  He 
must  have  more  than  barely  the  material  things  necessary 
to  support  life.  Yet  the  morgan,  with  his  pseudo  econo- 
mists, keeps  his  press,  his  pulpit  and  his  university  pro- 
geny constantly  busy  reminding  the  worker  of  the  things 
he  has  now  that  he  did  not  and  could  not  have  a  century 
ago. 

The  worker  has,  however,  been  awakening  and  mar- 
shalling his  forces.  He  has  been  coming  to  a  realization 
that  he,  too,  is  here  to  live  and  that  to  live  means  more 
than  simply  to  work  and  to  get  in  return  the  allowance 
measured  on  the  same  basis  and  principle  as  the  allow- 
ance of  the  prisoner  in  jail  is  measured. 

For  the  most  part,  the  worker  has  an  ambition  to  win 
a  larger  living  allowance,  and  then  to  win  gradually  more 
increases,  without  thinking  to  change  in  principle  the 
arrangement  under  which  the  morgan  piles  up  his  moun- 
tains of  surplus  values.  To  attain  this  end,  the  worker 
has  formed  extensive  organizations,  accumulated  funds 
and  waged  war  from  time  to  time.  These  wars  are  often 
directed  against  gentiles  of  the  second  order  because 
they  stand  between  the  morgan  and  the  gentiles  of  the 
first  order.  On  the  whole  the  worker  has  won  his  fights. 
Even  his  defeats  in  the  long  run  of  events  have  proved  of 
benefit  to  him.  But  his  victories  have  to  a  very  large  ex- 
tent been  hollow  victories.  Whenever  he  struck  for 
more,  he  was  largely  misled  by  a  misuse  of  terms.  The 
"more"  was  only  in  name.  In  reality  he  struck  against 
a  shortening  of  his  allowance  resulting  from  the  money 
juggle  and  other  maneuverings  of  the  morgan.  He  is  not 
getting  more,  he  is  getting  less  than  formerly.  The 
amount  that  a  man  gets  is  not  to  be  measured  by  the 


THE  STRUGGLE  OVER  WAGES  175 

yard  or  by  the  quart  or  by  the  pound.  It  must  be  meas- 
ured by  what  he  needs.  If  a  man  does  not  get  enough 
to  live  in  a  becoming  manner  in  the  community  in  which 
he  is,  then,  although  in  actual  bulk,  the  material  be  more, 
in  truth  and  in  fact  Ire  is  getting  less  than  he  got  when 
the  standards  of  life  were  more  modest  and  it  required 
a  less  quantity  in  bulk  of  material  to  live  becomingly  in 
his  community. 

From  the  morgan's  point  of  interest,  the  worker  lives 
only  to  work,  therefore  he  need  not  be  allowed  any  more 
than  just  enough  to  enable  him  to  work  and  reproduce 
his  kind  for  the  labor  market.  The  morgan's  interest  is 
that  the  worker  live  on  the  smallest  allowance  that  he 
can  be  squeezed  to  and  do  the  greatest  amount  of  work 
that  he  can  be  driven  to  do.  From  the  worker's  point  of 
interest,  he  works  only  that  he  may  live.  Hence  it  is  to 
his  interest  to  do  as  little  work  as  he  can  get  on  with,  and 
get  the  most  possible  to  be  gotten  out  of  life. 


CHAPTER  XVI. 
SUPPLY  AND  DEMAND. 

The  morgan's  classical  political  economists  seek  to 
account  for  all  the  disparities  that  exist  in  human  society 
by  what  they  call  the  "law"  of  supply  and  demand.  They 
tell  us  that  if  a  commodity  is  plentiful  it  is  cheap,  if 
scarce  it  will  be  dear.  They  say  that  labor  is  a  com- 
modity and  is  subject  to  the  "law"  that  governs  the 
price  of  all  other  commodities,  that  when  the  supply  of 
labor  exceeds  the  demand,  the  price  of  labor,  wages, 
must  decline,  and  when  the  demand  for  labor  exceeds 
the  supply,  the  price  of  labor,  namely  wages,  will  ad- 
vance. They  say  that  things  work  naturally  that  way 
and  that  it  is  folly  to  oppose  nature. 

The  so-called  "law"  of  supply  and  demand  is  the  great 
conventional  stumbling  block  to  the  study  of  the  meas- 
ure of  values  and  of  wages.  The  existence  of  such  a 
"law"  as  a  law  of  economics  has  never  been  established 
by  valid  proof  or  argument.  It  has  merely  been  asserted. 
It  is  a  piece  of  half-way  reasoning.  It  furnishes  a  sort 
of  sheltered  haven  for  those  who  do  not  care  to  search 
any  farther.  It  furnishes  just  enough  of  the  stuff  that 
looks  like  logical  argument  from  sound  premises  to 
satisfy  the  indolent  mind,  the  mind  that  loafs  on  the 
job ;  it  circumvents  troublesome  questions  and  then  claims 
credit  for  solving  them.  Tfrese  learned  doctors  claim 
much  credit  for  their  discoveries,  are  received  with  open 
arms  by  other  learned  doctors,  are  decorated  with 
wreathes  of  roses  and  then  richly  rewarded  for  great 
services  pretended  to  have  been  rendered  to  mankind. 

The  whole  being  of  the  man  who  has  studied  modern 

17fi 


SUPPLY  AXD  DEMAND  177 

political  economy  and  sociology  rebels  against  this  so- 
called  economic  "law."  Some  who  have  only  scratched 
the  surface  shrug  their  shoulders  and  say,  "We  can't  get 
away  from  it."  Some  say,  "It  is  a  harsh  law  and  not 
entitled  to  any  respect,  therefore  we  will  try  to  circum- 
vent it  or  break  it.'  Still  others,  guided  by  a  sort  of 
intuition,  deny  that  there  is  such  a  law,  and  as  good  and 
loyal  supporters  of  the  gentile  cause,  say,  "It  is  false. 
There  is  no  such  law."  The  latter  constitute  a  very 
large  number.  They  are  conscientious  students.  They 
proceed  from  established  facts  to  sound  conclusions. 
Those  who  premise  the  existence  of  such  a  law  make  the 
assertion  in  the  most  confident  and  authoritative  tone 
they  can  command  and  pass  on  to  the  next  subject,  leav- 
ing the  questioner  to  feel  stupid  for  ever  having  asked 
questions  about  it.  But  a  great  deal  better  treatment  of 
the  subject  is  possible. 

Whenever  a  question  proves  so  extremely  troublesome, 
it  is  best  to  analyze  it  before  either  trying  to  answer  or 
to  solve  it  by  guessing.  So,  let  us  first  ask,  What  is 
meant  by  a  law?  The  answer  is  that  it  is  a  prescribed 
rule.  Then,  who  prescribed  this  rule?  If  anyone  should 
answer  that  it  was  prescribed  by  man,  we  might  say  (1) 
then  man  can  revoke  it,  (2)  that  in  the  study  of  eco- 
nomics we  are  studying  a  science  resting  upon  natural 
laws,  and  these  cannot  be  subjected  to  man-made  laws. 
If  the  answer  be  that  it  is  a  natural  law,  then  let  us  enter 
a  general  denial  right  here  and  we  shall  have  the  issue 
before  us. 

It  is  not  a  natural  law.  And  whatever  we  may  call  it 
for  the  purposes  of  the  argument,  it  relates  only  to  social 
relations,  and  in  the  absence  of  human  beings  it  could 
have  no  existence.  There  is  not  a  single  natural  law  that 
is  in  the  slightest  degree  dependent  for  its  existence  upon 
man  or  influenced  in  its  operation  by  human  beings.    Not 


178  WHY  THE  CAPITALIST? 

a  single  one  of  the  natural  laws  can  be  suspended  or  in 
the  slightest  degree  modified,  intensified  or  in  any  other 
manner  affected  by  anything  that  man  can  do. 

The  morgan  nor  anyone  else  can  make  a  pound  of  iron 
weigh  more  than  a  pound  without  adding  to  the  amount 
of  the  material,  nor  otherwise  affect  the  law  of  gravita- 
tion, nor  make  twice  two  any  more  or  any  less  than  four, 
nor  change  the  general  law  that  heat  expands  and  cold 
contracts,  nor  amend  the  laws  of  heat  or  light  or  sound, 
nor  suspend  the  laws  of  magnetic  attraction  or  repulsion, 
or  any  of  the  many  laws  of  electricity,  hydraulics,  pneu- 
matics, dynamics,  or  mechanics.  Who  can  change  the 
laws  governing  the  movement  of  the  earth?  Who  can 
make  the  moon  come  nearer,  or  go  farther  from  us,  or 
show  us  her  other  side?  Who  can  change  or  in  any 
manner  affect  the  laws  that  govern  the  ocean's  tide  or  its 
currents?  Who  can  change  the  laws  of  the  season's? 
Who  can  change  the  laws  of  meteorology?  Who  can 
change  the  law  of  the  indestructability  of  matter,  even 
to  the  extent  of  destroying  a  single  atom?  To  cite  any 
more  of  the  natural  laws  would  be  wearisome  and  not 
add  to  the  argument  that  no  man  or  set  of  men  can  by 
manipulation  of  the  market  or  by  any  other  means  affect 
any  of  the  natural  laws.  These  laws  are  always  uniform 
in  their  operation,  never  ceasing,  never  abating  one  tittle 
all  pervading  and  inexorable. 

How  about  this  so-called  law  of  supply  and  demand? 
A  supply  can  be  created,  increased,  decreased,  or  en- 
tirely shut  off  by  man;  likewise  a  demand.  It  is  within 
the  power  of  the  morgan  to  set  at  defiance  the  "law"  of 
supply  and  demand  and  decree  if  he  will  that  every 
worker  under  his  thumb  shall  receive  say  twenty-five 
per  cent  more  than  the  market  price  of  his  labor,  just 
as  he  has  it  within  his  power  to  hold  him  down  to  the 
scantiest  livelihood. 


SUPPLY  AND  DEMAND  1?9 

The  conventional  political  economists  say  that  there 
are  some  goods  the  value  of  which  is  determined  by  their 
scarcity  alone;  that  no  labor  can  increase  the  quantity 
of  such  goods ;  and  therefore  their  value  cannot  be  low- 
ered by  an  increased  supply ;  that  some  rare  statues  and 
pictures,  scarce  books  and  coins,  wines  of  peculiar  qual- 
ity, which  can  only  be  made  from  grapes  grown  on  a 
particular  soil,  of  which  there  is  a  very  limited  quantity, 
are  all  of  this  description ;  that  their  value  is  wholly 
independent  of  the  quantity  of  labor  originally  necessary 
to  produce  them,  and  varies  with  the  varying  wealth  and 
inclinations  of  those  who  are  desirous  to  possess  them. 

Thus  the  whole  of  this  important  element  of  political 
economy  is  left  to  be  buffeted  about  as  the  whims  of  the 
morgan  may  dictate.  That  were  indeed  a  sorry  sort  of 
a  rule  for  a  science  of  the  material  welfare  of  human 
beings. 

Their  difficulty  is  that  they  do  not  differentiate  between 
price  and  their  notions  of  value.  Price  is  only  an  expression 
of  what  they  call  the  amount  of  value.  The  expression  is 
usually  correct.  But  it  is  not  uncommon  that  an  article  sells 
for  more  or  for  less  than  the  amount  of  attributed  value  it 
contains.  Hence  we  have  two  serious  errors  committed  by 
the  morgan's  economists.  First,  they  take  the  exceptions  for 
the  basis  of  their  so-called  rule ;  secondly,  they  take  the  ex- 
pression, price,  for  the  substance,  value. 

The  great  masses  of  humanity  are  excluded  from  a 
participation  in  their  heritage.  They  must  buy  all  their 
livelihood  and  are  fleeced  in  buying  it.  To  them,  all  this 
talk  of  the  price  paid  by  morgans  for  rare  wines,  rare 
statues,  rare  pictures,  rare  books,  and  rare  coins  pro- 
duced by  gentiles  to  buy  tlicir  livelihood,  is  the  sheerest 
twaddle.  It  is  a  learned  disquisition  on  the  haggling  over 
the  loot. 


180  WHY  THE  CAPITALIST? 

If  an  artist  should  receive  a  full  equivalent  in  value 
for  a  work  of  art  produced  by  him,  say  one  of  the  rare 
pictures,  how  could  that  afford  any  possible  reason  why 
other  gentiles  should  be  denied  a  full  equivalent  of  the 
value  produced  by  their  labor,  or  why  they  should  be 
denied  their  share  of  nature's  free  goods?  Or,  if  a  great 
artist  be  compelled  to  live  the  life  of  a  beggar,  as  many 
of  them  have,  and  all  the  value  produced  by  him  in  a 
rare  statue  is  appropriated  by  the  morgan  in  the  guise 
of  trader  or  art  dealer,  wherein  does  that  prove  the  right 
to  expropriate  and  exploit  the  remainder  of  the  gentiles 
also?  Does  the  successful  spoliation  of  Tom  give  a 
vested  right  to  despoil  Dick  and  Harry  also? 

This  much  lauded  law  of  supply  and  demand  is  no  law 
at  all.  A  mere  fragment  of  truth  disconnected  and  di- 
verted from  other  and  much  more  important  and  deter- 
mining considerations,  has  been  accepted  as  a  basis  of  a 
doctrine,  and  this  doctrine  proclaimed  as  a  law  by  the 
morgan's  doctrinaires. 

The  pronouncement  of  this  so-called  law  is  nothing 
more  nor  less  than  the  taking  of  an  effect  for  the  cause. 
This  cause  is  the  instinct  of  self-preservation.  We  hear 
much  idle  talk  of  buying  human  service,  of  buying  labor 
in  the  market.  Let  us  go  back  of  this  and  discuss  the 
subject  that  comes  before  all,  both  in  order  of  time  and 
importance,  namely,  the  subject  of  buying  a  livelihood. 
That  was  the  first  and  original  subject  of  bargain  and 
sale  between  the  gentile  and  the  morgan.  That  is  the 
subject  first  in  importance  still.  It  presents  the  question 
that  lies  at  the  root  of  all  of  the  questions  that  confront 
the  gentile  to  this  day.  When  the  gentile  works  for 
wages,  he  does  so  that  he  may  live.  He  is  buying  the 
means  of  life,  then  and  there,  the  rigamarole  of  money 
and  business  notwithstanding.  He  is  paying  for  the 
means  of  life  with  his  labor  power. 


SUPPLY  AND  DEMAND  181 

Nature  is  most  bountiful,  and  when  her  processes  are 
supplemented  by  human  effort,  she  yields  forth  more  than 
sufficient,  not  only  of  the  necessaries,  but  also  of  the 
luxuries,  for  everyone.  Every  sane  human  being  will 
find  pleasure  in  putting  forth  that  effort  when  he  knows 
that  he  will  receive  in  full  the  fruits  thereof.  But  the 
gentile  is  always  confronted  by  the  morgan,  club  in  hand, 
blocking  the  way  to  nature's  resources,  and  the  way  to 
work,  demanding  and  exacting  in  full  not  only  all  that 
nature  produces  spontaneously  but  also  all  that  she  yields 
in  response  to  the  gentile's  effort,  supplementing  her 
processes,  all  of  that  which  the  gentile's  brain  and  hand 
produces  of  value  in  addition  to  nature's  materials.  Of 
all  this  the  morgan  gives  back  to  the  gentile  only  as  much 
as  he  has  to  give  back  to  make  the  gentile  willing  to 
work  for  his  livelihood,  rather  than  go  without. 

In  the  exercise  of  his  monstrous  power,  the  morgan 
restricts  the  volume  of  production  to  the  amount  only 
necessary  for  his  market.  The  restriction  of  this  sup- 
ply to  the  amount  just  necessary  to  keep  the  process 
going  makes  it  easier  for  the  morgan  to  hold  the  gentile 
down  to  the  limitation  set  for  him,  and  to  render  him 
obedient  and  subservient. 

The  gentile,  like  the  birds  of  the  air,  is  born  into  a 
world  abundently  stocked  with,  the  free  goods  of  nature, 
to  sustain  life  in  happiness.  Besides  that,  there  is  a  vast 
store  and  accumulation  of  learning,  wisdom  and  experi- 
ence, of  a  long  line  of  ancestors,  to  serve  us  in  multiply- 
ing many  times  the  benefits  and  sustaining  powers  of 
that  which  nature  furnishes  spontaneously.  All  of  this 
is  naturally  for  the  free  use  of  everyone.  All  of  this 
constitutes  our  livelihood.  But  when  the  gentile  reaches 
out  to  take  of  that  sustenance  supplied  for  him  by  nature, 
as  the  birds  of  the  air  take  it,  he  finds  himself  stayed 


182  WHY  THE  CAPITALIST? 

by  the  morgan  and  the  morgan's  church  and  state,  laws 
and  conventions. 

The  gentile  finds  that  he  must  buy  that  which  is  al- 
ready his,  but  of  which  he  is  being  forcibly  deprived. 
He  must  pay  for  his  livelihood.  He  must  buy  it  of  the 
morgan.  The  gentile  is  empty  handed,  shorn  of  all  his 
inheritance.  All  that  he  has  now  is  the  power  to  work, 
and  the  continuance  of  this  power  is  dependent  upon 
his  getting  the  means  to  continue  life.  So,  if  he  desires 
to  live,  he  gives  his  fealty  to  the  morgan,  serves  him  and 
receives  the  means  necessary  to  sustain  his  life. 

The  meagerness  of  the  means  of  life  that  the  gentile 
is  willing  to  work  for  is  dependnt  upon  the  strength  of 
his  desire  to  live,  and  his  ideas  of  the  living  that  is 
worth  while  working  for.  With  some  men  the  desire  for 
life  and  the  fear  of  death  is  so  much  stronger  than  with 
others,  and  the  standard  of  a  life  worth  while  working 
for  so  much  lower  that  they  are  consequently  willing  to 
work  more  and  receive  less.  The  African  negro  had  a 
stronger  desire  to  live  and  a  greater  fear  of  death  than 
the  American  Indian.  Therefore  the  African  negro  was 
made  a  willing  slave.  He  would  work  hard  for  his 
livelihood  and  accept  a  small  measure  of  his  share  of 
nature's  life  sustaining  goods.  The  living  that  it  was 
worth  his  while  to  work  for  was  a  comparatively  poor 
living.  The  attachment  to  life  and  the  fear  of  death 
were  much  weaker  with  the  American  Indian.  There- 
fore the  American  Indian  was  practically  worthless  as  a 
slave.  He  did  not  consider  a  slave's  life  worth  while 
working  for,  so  the  Indian  refused  to  work  for  it.  He 
also  refused  to  recognize  title  and  property  as  having 
any  right  to  stand  between  himself  and  what  he  needed. 
As  a  consequence  the  Indian  was  on  the  war-path  a 
great  deal  of  the  time,  but  he  was  never  a  slave.     His 


SUPPLY  AND  DEMAND  183 

mind  never  came  under  the  domination  of  the  morgan's 
pulpit,  press  and  state. 

So  long  as  the  life-giving  things  and  the  means  of  get- 
ting them  are  the  private  property  of  the  morgan  and 
can  be  locked  up  by  him,  the  greatness  of  the  supply  of 
those  things  will  not  and  cannot  affect  the  price  that  the 
gentile  is  compelled  to  pay  in  services  for  his  livelihood. 
Neither  the  largeness  nor  the  smallness  of  the  morgan's 
pile  of  accumulated  wealth  can  in  itself  increase  or  de- 
crease the  gentile's  desire  to  live.  The  greater  the  mor- 
gan's pile  the  more  it  might  impress  the  gentile  with  the 
utter  hopelessness  of  his  situation.  But  this  would  not 
make  wealth  easier  for  the  gentile  to  get.  It  is  quite  to 
the  contrary.  The  greater  the  pile  of  wealth  that  is 
heaped  up,  the  more  difficult  it  is  for  the  gentile  to  get 
it.  So  that  we  really  find  that  this  law  of  supply  and 
demand  works  the  other  way  than  that  claimed  for  it  by 
its  votaries.  Cheapness  in  its  final  analysis  means  easi- 
ness to  get,  and  the  greater  the  amount  of  wealth  there  is 
in  the  world,  under  present  conditions,  the  harder  it  is 
for  the  gentile  to  get  any  of  it.  Hence  when  we  apply 
this  so-called  law  of  supply  and  demand  to  the  whole 
situation  and  embrace  all  wealth,  we  find  that  the  greater 
the  supply,  the  higher  the  price  that  the  gentile  must 
pay  for  any  portion  of  it.  In  fact,  when  it  comes  to 
getting  any  more  than  a  livelihood,  the  price  becomes 
practically  prohibitive. 

The  gentile's  instinct  of  self-preservation  is  not  de- 
pendent upon  the  amount  of  goods  that  the  morgan 
holds  in  his  grip. 

There  is  but  one  rule,  or  "law."  if  we  please  to  call  it 
such,  and  that  is  that  the  more  completely  the  morgan 
can  bar  out  the  gentile  from  the  free  goods  of  nature, 
the  greater  the  amount  of  subservient  work  he  can  exact 
from  the  gentile,  subject  to  the  one  limitation,  that  the 


184  WHY  THE  CAPITALIST? 

livelihood  of  the  gentile  be  not  rendered  so  miserable  as 
to  seem  not  worth  while  living  and  working  for. 

The  shutting  off  from  the  gentile  of  the  sustenance 
furnished  for  him  by  nature  is  no  different  in  principle 
than  the  opening  of  his  arteries  would  be  or  the  stopping 
of  the  flow  of  his  blood  through  his  body.  The  atten- 
tion might  then  also  be  diverted  from  the  criminality 
of  the  act  by  using  the  same  Mephistophelian  argument 
that  all  of  the  resulting  discomforts  of  the  gentile  were 
due  to  the  workings  of  the  "law"  of  supply  and  demand. 

What  is  the  difference  either  in  principle  or  effect  be- 
tween muzzling  the  ox  or  locking  up  all  the  provender? 
Could  it  be  said  seriously  that  the  hunger  of  the  ox  was  a 
legitimate  result  of  the  operation  of  the  law  of  supply 
and  demand? 

The  wolf  in  the  fable  was  invited  to  a  banquet  by  the 
stork,  and  found  a  most  bountiful  supply  of  delicious 
viands.  But  these  good  things  were  all  contained  in 
narrow,  tall  vases.  Only  the  stork's  long  bill  could 
reach  into  the  recesses  of  this  strange  kind  of  table 
ware.  So  the  wolf,  being  a  law-abiding  wolf  and  an  ob- 
server of  the  proprieties,  went  away  more  hungry  than 
he  came.  Now  it  will  be  conceded  that  the  supply  was 
sufficient,  as  well  as  the  demand.  In  fact,  the  supply  far 
exceeded  the  demand.  But  that  did  not  cheapen  the 
price  of  the  victuals  for  the  wolf.  They  were  just  as 
difficult  for  him  to  get,  legally  and  politely,  as  if  there 
had  been  no  supply  at  all.  Hence  they  were  very  high 
priced  for  the  wolf. 

If  a  small  piece  of  cheese  should  appear  in  the  same 
cage  with  two  hungry  rats,  we  should  have  an  instance 
of  a  small  supply  and  a  large  demand.  The  resulting 
scene  would  without  doubt  afford  a  very  illuminating 
illustration  of  the  operation  of  the  so-called  economic 
"law"  of  supply  and  demand. 


SUPPLY  AND  DEMAND  185 

Strangling  a  baby  with  a  garter,  in  acceptance  of  this 
"law"  would  be  a  comparatively  innocent  act.  The  case 
would  simply  be  that  the  supply  of  air  for  the  baby's 
lungs  did  not  equal  the  demand  of  the  baby's  life. 

No  more  subtle  device  for  avoiding  consideration  of  a 
prime,  actuating  and  moving  cause,  and  keeping  the 
mind  busy  with  secondary  and  subsidiary  forces  and  in- 
struments, has  ever  been  conceived  than  this  so-called 
economic  "law"  of  supply  and  demand.  Following  the 
same  leading  principle,  it  might  be  said  that  a  man 
pushed  over  a  precipice  by  another  came  to  his  death 
through  the  law  of  gravitation,  or  that  a  man  shot  to 
death,  met  his  end  by  reason  of  the  expansive  property 
of  gases  generated  in  the  barrel  of  a  gun ;  and  that  these 
are  natural  laws  that  no  human  power  can  obviate. 

The  only  object  or  purpose  of  promulgating  such  a 
"law"  as  this  so-called  "law"  of  supply  and  demand,  is 
to  give  a  specious  and  misleading  explanation  and  ex- 
cuse for  expropriation  and  exploitation.  In  the  chapters 
on  private  property  and  on  wages  it  was  pointed  out  that 
by  the  expropriation  of  all  the  resources  of  nature  and  the 
means  of  production,  the  rest  of  mankind,  the  gentile, 
have  been  placed  in  the  position  of  the  man  in  prison,  or 
the  rat  in  a  cage ;  for,  to  be  excluded  by  force  from  the 
natural  means  of  livelihood  is  no  different  in  principle 
than  to  be  imprisoned  in  a  cell.  It  remains  only  a  ques- 
tion of  how  much  a  man  will  endure  for  the  sake  of  hold- 
ing on  to  his  life.  If  life  is  so  sweet  to  him  that  he  will 
endure  anything  to  keep  alive,  then  he  will  submit  to 
any  terms  that  his  jailer  or  master  will  impose,  so  long 
as  he  gets  enough  to  keep  alive. 

In  the  discussion  had  on  the  subject  of  value,  three 
propositions  bearing  on  this  subject  were  clearly  estab- 
lished. One  is  that  the  free  goods  of  nature  have  no  value 
whatever  in  an  economic   sense.     They   have   usefulness 


18G  WHY  THE  CAPITALIST  ? 

without  value,  are  invaluable,  in  truth.  The  second  is 
that  in  an  economic  sense  nothing  has  value  save  as  that 
value  has  been  created  by  labor.  The  third  is  that  the 
only  equivalent  of  the  value  created  by  labor,  is  a  like 
amount  of  productive  efficient  labor.  Two  conclusions 
are  therefore  unavoidable.  The  one  is  that  the  so-called 
"law"  of  supply  and  demand  can  have  no  effect  upon  a 
value  that  does  not  exist,  as  in  the  case  of  the  free  goods 
of  nature.  The  other  is  that  this  so-called  "law"  cannot 
determine  the  measure  of  the  value  created  by  labor,  as 
that  value  can  be,  and  is  determined  only  by  other  labor. 

It  should  not  be  necessary  to  spend  time  discussing 
the  effect  of  supply  and  demand  on  rare  articles  not  re- 
quired to  meet  general  human  needs.  The  possession  of 
these,  whether  by  Tom,  Dick  or  Harry,  is  not  of  the 
slightest  importance  to  human  society.  The  Cullinan 
diamond  may  remain  in  the  Tower  of  London,  or  it 
might  be  sent  back  to  South  Africa,  or  thrown  into  the 
sea,  without  in  the  slightest  degree  affecting  the  welfare 
of  humanity. 

As  to  the  competition  between  Tommy  Numskull  and 
Percy  Hollowhead  resulting  in  the  enormous  price  paid 
for  some  monstrosity  of  a  dog,  it  is  not  worthy  of  much 
consideration  as  bearing  upon  the  controversy.  They  are 
morgans.  Theirs  is  nothing  but  an  artificial  situation, 
here,  produced  by  themselves  as  a  result  of  their  artificial- 
ized  minds,  though  we  may  admit  that  it  is  not  product- 
ive of  any  direct  baneful  results  upon  society.  The  indi- 
rect baneful  results  of  debasing  their  own  minds  that 
might  be  employed  in  better  things,  and  the  consump- 
tion of  labor  power  in  the  production  of  deformed  dogs 
and  such  things  is  slight  compared  to  other  things.  To 
compare  for  a  moment  the  consideration  of  this  sort  of 
clap-trap  with  the  consideration  of  the  wants  and  needs 


SUPPLY  AND  DEMAND  187 

of  the  mass  of  human  kind  is  only  to  trifle  with  a  serious 
subject. 

Yet  here  it  might  also  be  pointed  out  that  it  was  the 
instinct  of  self-preservation  that  led  the  worker  to  dis- 
cover and  dig  up  the  diamond,  to  cut  and  polish  it,  to 
breed  and  produce  the  queer  dog  with  undershot  jaw. 
crooked  ears  and  mangled  tail,  so  that  he  might  facili- 
tate the  getting  of  his  livelihood  by  catering  to  the  whims 
of  the  morgan.  The  worker  does  it  for  a  living.  "What 
does  he  do  for  a  living?"  is  a  very  common  question, 
and  is  strictly  accurate  and  to  the  point.  Whether  the 
worker  produces  diamonds,  breeds  abnormities  or  piles 
up  enormous  fortunes  for  the  morgan,  it  is  all  the  same. 
He  has  to  satisfy  the  morgan's  whim.  He  has  to  buy  his 
livelihood  from  the  morgan ;  has  to  pay  a  price  that  will 
satisfy  the  morgan's  whim  in  a  form  and  manner  that 
will  meet  the  approval  of  the  morgan's  freakish  mind. 
The  whimsical  turns  and  twists  and  competitions  of  the 
morgan's  market  do  not  and  cannot  change,  either  the 
principles  involved  or  the  results.  On  the  whole,  it 
simply  presents  one  phase  of  the  present  condition  of 
human  society  in  which  the  worthy  is  subjected  to  a 
slavish  subserviency  to  the  unworthy. 

The  morgan  can  no  more  escape  responsibility  for  the 
torture  and  murder  of  the  gentiles  under  his  industrial 
regime  on  the  plea  of  his  so-called  law  of  supply  and 
demand  than  the  infanticide  can  escape  conviction  of  mur- 
der for  strangling  the  baby  on  the  plea  that  all  he  did 
was  to  perform  the  perfectly  innocent  act  of  shutting  off 
the  baby's  air,  and  that  the  "law"  of  supply  and  demand 
did  the  rest,  and  was  therefore  the  sole  cause  of  the 
baby's  death- 
After  all  is  summed  up  it  cannot  make  any  difference 
whether  we  call  this  thing  labeled  supply  and  demand 
a  law  or  by  any  other  name.     This  seems  irrefutable, 


188  WHY  THE  CAPITALIST? 

that  under  present  conditions  it  is  nothing  more  nor 
less  than  an  instrument  wholly  in  the  control  and  own- 
ership of  the  morgan  to  oppress  and  exploit  the  gentiles. 

The  morgan  rests  his  case  on  his  so-called  "law"  of 
supply  and  demand.  Thus  he  tells  the  gentile  to  at- 
tribute his  situation  to  the  agent  and  instrumentality  by 
which  the  system  is  perpetuated,  rather  than  to  the  sys- 
tem or  to  the  morgan's  predatory  disposition.  Insofar  as 
the  morgan  and  his  panders  have  succeeded  in  this,  their 
plan  of  a  "higher  education,"  the  gentile  has  been  kept 
busy  clawing  at  the  end  of  a  torturing  prod. 

It  is  extremely  doubtful  if  an  imprisoned  tiger  would 
spend  his  time  or  break  his  teeth  on  the  end  of  the  iron 
rod  with  which  he  is  being  prodded  by  his  tormentor,  if 
it  were  not  for  the  iron  bars  of  his  cage.  The  tiger  has 
not  been  "educated"  in  the  morgan's  school  of  political 
economy. 

The  morgan's  Supply  and  Demand  dogma,  reduced  to 
its  absurdidty,  gives  us  this  result: 

Say  that  the  needs  of  the  world  demand  and  that  the 
world  normally  produce  10,000,000,000  bushels  of  wheat 
normally  of  the  value  of,  say,  75  cents  a  bushel,  making 
$7,500,000,000,000;  and  that  in  a  poor  year  only  8,000,- 
000,000  bushels  are  produced.  There  would  be  a  short- 
age of  2,000,000,000  bushels.  This  would  increase  the 
value  of  wheat  to  say  $1.00  per  bushel.  That  would  give 
the  world  $8,000,000,000  in  wealth.  Here  we  would  have 
a  gain  of  $500,000,000  in  the  world's  wealth  as  a  result 
of  the  shortage  in  the  wheat  crop. 

The  next  year,  with  the  needs  of  the  world  demand- 
ing the  same  amount,  there  are  produced  say  12.000,000,- 
000  bushels.  This  would  certainly  send  wheat  "values" 
down.  If  they  went  down  as  low  as  50  cents  a  bushel, 
we  should  see  the  world's  wealth  in  wheat  represented 
by  $6,000,000,000.     Thus  the  anomalous  situation  would 


SUPPLY  AND  DEMAND  189 

be  presented  that  the  world  with  12,000,000,000  bushels 
of  good  wheat  in  its  bins  would  be  $2,000,000,000  poorer 
than  it  was  with  only  8,000,000,000  bushels.  If  the  wheat 
crop  had  been  14,000,000,000  bushels  and  all  other  crops 
equally  abundant,  the  world  would  be  poverty  stricken. 
But  if  the  farmers  all  united  and  wantonly  destroyed 
half  of  all  that  was  produced,  prosperity  would  be  with 
us  again,  the  7,000,000,000  bushels  of  wheat  would  jump 
at  once  in  value  to  about  $1,25  a  bushel  making  the 
wheat  crop  worth  $8,750,000,000.  All  of  the  rest  of  the 
agricultural  products  left  to  the  world  from  the  great 
destruction  would  go  up  in  about  the  same  measure. 
How  gloriously  rich  the  world  would  be  because  of  the 
resulting  high  prices ! 

Take  diamonds.  If  every  pebble  in  every  gravel  de- 
posit were  suddenly  turned  into  a  diamond,  all  of  the 
so-called  wealth  in  diamonds  would  disappear  at  once ! 
If,  however,  the  supply  of  diamonds  were  diminished 
again,  by  casting  all  of  the  newly  found  gems  into  the 
sea,  why  all  our  wealth  would  again  be  restored  in- 
stantly ! 

Since  in  times  of  stress,  famine  and  shortage,  all 
necessaries  go  up  in  prices,  we  are  always  richest  when 
we  have  been  visited  with  late  frosts,  drouths,  locusts, 
crop  destroying  hail-storms,  floods,  etc.,  etc.  If  we  wish 
to  increase  the  value  of  city  houses  and  send  rents  up, 
all  we  need  do  is  to  burn  down  half  the  town  or  arrange 
to  have  a  cyclone  strike  it,  and  the  national  wealth  will 
be  increased  at  once  without  the  driving  of  a  nail  or  the 
laying  of  a  brick. 

Under  this  morgan  theory  of  supply  and  demand,  the 
greater  the  supply  of  useful  things  we  have,  the  poorer 
we  are,  and  the  less  the  supply  of  goods  at  our  com- 
mand, the  richer  we  are.    It  is  all  in  the  thinking. 


CHAPTER  XVII. 
MONEY. 

We  are  accustomed  to  have  it  said  that  money  is  a 
medium  of  exchange.  The  expression  is  strictly  correct, 
yet  withal,  most  misleading,  because  the  mind  becomes 
extremely  prone  to  suspend  all  further  inquiry  as  soon 
as  the  expression  is  received.  All  further  investigation 
is  abandoned  at  once.  Furthermore,  the  statement  that 
money  is  a  medium  of  exchange  carries  with  it  two  sug- 
gestions that  are  both  false.  One  of  these  is  that  money 
is  not  anything  else,  that  it  possesses  no  other  qualities, 
properties  or  functions.  The  second  is  that  it  is  the  only 
medium  of  exchange  that  there  is  or  can  be.  Both  of 
these  illusions  cause  far-reaching  mental  confusion. 

That  which  is  called  money,  originally,  was  not  money 
at  all,  as  the  term  money  is  now  understood.  First  it 
was  only  a  thing  of  some  usefulness,  a  good.  When 
the  possessor  came  to  exchange  it  for  some  other  thing, 
it  took  on  another  quality  and  function,  that  is,  it  be- 
came also  an  article  of  barter,  to  trade  off  for  something 
else.  This  was  quite  separate  and  aside  from  the  quality 
which  it  already  possessed  of  usefulness  to  its  owner.  It 
took  on  a  second,  but  extraneous,  usefulness,  as  it  were. 
This  second  usefulness  differed  quite  distinctly  from  the 
first.  The  good  became  a  means  of  getting  some  other 
good.  The  difference  was  somewhat  like  that  of  throw- 
ing an  apple  into  a  peach  tree  to  knock  down  peaches. 
That  would  be  using  the  apple  not  as  an  apple,  but  as  a 
missile  to  get  peaches.  Using  a  fire  poker  as  a  club  is 
another  illustration.  The  poker  still  remains  a  poker. 
The  baby  carriage  when  used  to  bring  home  groceries 

190 


MONEY  191 

does  not  thereby  become  any  the  less  a  baby  carriage. 
When  goods  come  to  be  considered  as  things  to  be  traded 
for  other  goods  they  also  naturally  come  to  be  regarded 
with  a  different  aspect  than  before.  It  is  no  longer  the 
question  what  can  I  do  with  them?  but  it  is  what  can 
I  get  for  them,  and  how  much  can  I  get  for  them?  Par- 
ticularly the  latter. 

The  thing  that  a  commodity  is  exchanged  for  is  merely 
a  good  in  the  hands  of  the  new  owner  if  he  takes  it  for 
its  inherent  usefulness  for  himself.  But  if  he  takes  the 
new  article  only  to  exchange  it  again  for  still  something 
else,  then  it  too  is  a  commodity.  It  then  becomes  also 
a  mere  medium  for  the  exchange  of  the  original  thing 
possessed  for  the  thing  ultimately  wanted.  If  the  article 
is  one  that  is  readily  exchangeable  for  things  wanted  and 
therefore  is  generally  taken  in  exchange,  it  becomes  a 
favorite  commodity  and  therewith  a  generally  used  me- 
dium of  exchange.  But  it  does  not  thereby  lose  any  of 
its  other  or  previously  possessed  qualities,  even  though 
those  qualities  be  lost  sight  of  in  the  greater  attention 
paid  to  that  of  the  medium  of  exchange.  The  apple 
remains  an  apple,  no  matter  how  many  times  it  be  used 
as  a  missle,  and  the  poker  remains  a  poker  no  matter 
how  many  times  it  be  used  as  a  club.  So  too  with  the 
baby  carriage. 

When  a  commodity  becomes  a  medium  of  exchange  it 
becomes  at  the  same  time  a  means  of  admeasuring  the 
values  attributed  to  other  commodities  in  exchange,  by 
having  the  desireablcness  of  owning  it  brought  into  con- 
trast and  comparison  with  the  desireableness  of  owning 
those  other  commodities.  It  is  thus  made  a  measure. 
Nor  does  this  alter  any  of  its  former  qualities,  for  it  is 
also  merely  an  adding  on. 

Last  of  all,  this  good  which  has  gone  through  the 
process  of  evolution  and  taken  on  these  aforementioned 


192  WHY  THE  CAPITALIST? 

qualities  and  functions  until  we  see  it  is  a  general  me- 
dium of  exchange  and  measure  of  attributed  value,  has 
superimposed  upon  it  still  another  office  and  function. 
This  last  is  the  result  of  legislation  and  constitutes  the 
sole  cause  of  all  the  artificialities  attached  to  the  subject. 
This  last  quality  and  function  is  that  of  a  legal  tender 
or  medium  of  state-enforced  quittance.  The  greatest 
number  of  functions  performed  by  money  is  thereby 
reached.  The  subsequent  evolution  of  money  relates  to 
the  increase  and  decrease  in  importance  of  the  respective 
functions  and  offices  of  money  as  compared  with  each 
other. 

Here  we  have  then  five  distinct  qualities  and  functions 
and  therefore  five  distinct  aspects  of  money,  four  of  them 
the  result  of  undirected  development,  and  the  fifth  one 
the  result  of  deliberate  legislation.  These  should  be  well 
borne  in  mind  and  are  therefore  set  forth  as  follows : 
I.  A  Good. 
II.     A  commodity. 

III.  A  medium  of  exchange. 

IV.  A  standard  for  admeasuring  attributed  values. 
V.     A  legal  tender  or  medium  of  state-enforced  quit- 
tance. 

The  first  pertains  to  goods  held  for,  or  applied  to  per- 
sonal use.  The  second  is  assumed  by  goods  when  made 
the  subject  of  exchange.  The  third  and  fourth  are  as- 
sumed when  the  indirect  or  mediatorial  method  of  ex- 
change is  resorted  to.  The  fifth  is  called  the  legal  tender 
aspect  or  quality  and  comes  into  existence  when  the 
power  of  the  state  enters  for  the  enforcement  of  quit- 
tances. This  latter  is  a  wholly  artificial  office,  extrane- 
ously  attached  as  it  were,  and  altogether  dependent 
upon  legislation.  It  is  a  result  of  the  spirit  of  force  and 
coercion.  It  involves  the  expression  of  the  war  power  of 
the  state  in  collecting  its  own  demands  and  in  enforcing 


MONEY  193 

its  judgments.  But  it  is  not  an  essential  function  of 
money  as  goods,  or  as  a  commodity,  or  as  a  medium  of 
exchange  or  as  an  admeasurer  of  the  attributed  values 
of  other  commodities. 

The  first  four  of  the  enumerated  qualities  and  functions 
of  the  thing  called  money  are  not  and  never  can  be  con- 
fined to  money  nor  do  they  or  will  they  ever  depend 
for  their  continued  existence  upon  legislation,  so  long 
as  the  institution  of  private  property  continues.  They 
were  naturally  and  spontaneously  acquired  with  the  com- 
ing in  and  development  of  the  institution  of  private 
property.  They  are  the  unplanned  and  undesigned  prod- 
uct of  society  as  distinguished  from  state  consideration, 
deliberation  and  legislation. 

The  acquisition  and  exchange  of  commodities  for 
profit  constitutes  the  basis  of  the  whole  of  the  morgan's 
system  of  industry  and  business.  Therefore  exchange  of 
commodities  for  profit  constitutes  practically  the  whole 
of  its  character  giving  activities. 

Many  different  commodities  have  served  as  media  of 
exchange.  In  some  regions  it  was  live  stock,  in  other 
regious  dried  fish,  in  other  regions  tobacco  and  in  still 
other  regions  it  was  slaves.  Cattle  could  be  driven  from 
place  to  place  for  the  purposes  of  trade,  the  flesh  furnish- 
ing food  that  could  be  made  available  at  any  time.  Dried 
fish  represented  human  effort  and  also  served  as  food. 
Tobacco  was  always  in  demand  in  its  region.  The  slave 
could  easily  be  led  from  place  to  place  to  be  traded  off, 
and  in  the  meantime,  his  labor  power  could  be  utilized 
either  in  personal  service  or  in  the  production  of  surplus 
values. 

If  one  of  our  early  ancestors  owned  something  that  he 
had  no  particular  use  for  and  could  not  find  an  owner 
of  some  desired  article  who  was  willing  to  trade  with  him 
for  his  article,  he  naturally  would  try  to  trade  for  some- 


194  WHY  THE  CAPITALIST? 

thing  that  he  could  more  readily  trade  off  again  because 
of  its  useful  qualities  or  attractiveness,  and  so  use  the 
latter  article  as  a  medium  to  get  eventually  what  he 
was  unable  to  obtain  by  direct  exchange.  Thus  custom 
arose.  Certain  commodities,  because  more  easily  trade- 
able  than  others,  became  the  favorite  commodity,  and  in 
course  of  time  were  generally  accepted  as  media  of  ex- 
change. This  did  not  in  itself  involve  any  alteration 
in  the  nature  of  these  favorite  things  themselves  or  in 
their  functions  and  uses  either  as  goods  for  personal  use 
or  as  commodities  for  the  purpose  of  direct  trade  or 
profit.  It  was  merely  the  adding  on  of  new  and  further 
offices  and  functions,  and  the  extension  of  scope  and 
activity. 

Gold  and  silver  recommended  themselves  to  man. 
They  were  ordinarily  more  difficult  to  wrest  from  nature 
than  most  other  things.  They  therefore  represented 
more  human  labor.  They  were  easily  transported,  were 
attractive  to  the  eye,  could  be  formed  into  articles  of 
ornamentation.  In  a  word,  they  were  particularly  allur- 
ing and  afforded  a  splendid  parade  of  acquired  wealth. 
As  naturally  as  a  man  had  before  that  estimated  the 
attributed  value  of  a  field,  or  a  tent,  or  a  house,  in  slaves, 
or  heads  of  cattle,  or  dried  fish,  or  tobacco,  when  custom 
brought  gold  and  silver  into  vogue  he  readily  estimated 
and  computed  the  attributed  values  of  these  articles  of 
trade  in  pieces  of  gold  or  silver. 

The  temptation  to  debase  gold  and  silver  was  always 
great  because  there  were  great  profits  to  be  gained  by 
such  debasement.  Therefore  states,  to  protect  themslves. 
directly,  and  also  indirectly  through  protecting  their 
subjects  in  that  respect,  inspected  gold  and  silver  used 
as  media  of  exchange,  and  struck  these  metals  into  disks 
of  uniform  weight  and  fineness,  and  impressed  marks 
upon  them  so  that  the  quantity  and  fineness  of  the  metal 


MONEY  195 

in  each  disk  or  coin  was  thereby  assured.  Further  as- 
surance was  also  offered  by  prescribing  punishment  for 
counterfeiting.  This  in  itself  did  not  give  the  final  at- 
tributes of  money  to  the  coin,  although  it  did,  quite  inci-« 
dentally  and  accidentally,  as  it  were,  give  the  name  of 
money. 

In  ancient  Rome  the  first  money  was  coined  in  the 
Temple  of  Juno.  This  goddess  was  also  called  Moneta. 
Hence  the  coin  was  called  moneta  from  which  our  term 
"money"  is  derived.  With  the  name  we  also  inherited 
the  holy  mummery  and  mystery  surrounding  the  subject 
that  came  from  Moneta's  temple. 

Our  municipal  governments  inspect  milk  so  as  to  pro- 
tect us  from  cheats  and  enable  us  to  feel  assured  that 
the  milk  left  at  our  doors  in  bottles  complies  with  pre- 
scribed requirements  both  as  to  quality  and  quantity. 
Yet  no  additional  quality,  function  or  office  is  added  to 
the  milk  thereby.  The  state  also  inspects  other  com- 
modities nowadays,  supervises  and  marks  weights  and 
measures,  and  prescribes  penalties  for  adulteration  and 
falsification.  All  this  is  to  protect  us  from  being  cheated 
as  to  the  represented  quality  and  quantity  of  those  com- 
modities. So  far,  it  is  in  principle  no  less  and  no  more 
than  the  service  performed  by  the  state  in  striking  off 
gold  and  silver  coin. 

The  state — and  state  here  means  ruling  power — saw 
an  advantage  in  demanding  that  levies  of  taxes  and  as- 
sessments be  paid  in  gold  and  silver.  Fines  were  made 
payable  in  the  same  material.  The  same  rule  was  ex- 
tended to  damages  paid  by  one  subject  or  citizen  to  an- 
other for  injuries  to  persons  or  property  and  for  breaches 
of  contract.  Here  then  we  see  the  last  function  and 
office  added  which  distinguishes  money  from  all  other 
commodities.  The  good,  the  favorite  commodity,  the 
medium  of  exchange  and  the  measure  of  attributed  value.. 


196  WHY  THE  CAPITALIST? 

now  also  becomes  the  medium  of  legally  enforced  pay- 
ment and  settlement. 

One  of  the  natural  consequences  of  this  new  and 
additional  quality  and  office  now  legally  attached  to  the 
favorite  commodity  is  that  in  contraversies  over  amounts 
and  balances,  the  debtor  finds  it  to  his  advantage  to  avoid 
the  displeasure  of  the  law  and  so  tenders  to  the  creditor 
the  exact  amount  of  the  debt,  in  the  good  that  is  the 
very  body  of  the  favorite  commodity,  medium  of  ex- 
change, measure  of  attributed  value  and  now  also  me- 
dium of  enforced  quittance  or  payment.  The  debtor 
tenders  the  full  amount  of  the  debt  in  state-minted  coin. 
This  act  on  the  part  of  the  debtor  is  a  legal  tender.  The 
coin  that  answers  the  purpose  of  such  an  offer  or  tender 
is  also  called  a  "legal  tender."  This  term  may  also  be 
applied  to  the  bills,  or  what  is  known  as  paper  money; 
warehouse  certificates,  as  it  were,  used  as  a  convenient 
and  economical  representative  of  coin  and  redeemable  in 
coin  on  demand. 

That  gold  and  silver  in  the  form  of  coin  became  a  legal 
tender,  that  is,  money  in  its  more  fully  accepted  sense. 
or  that  in  later  years  gold  coin  with  its  equivalent  of 
bills  and  certificates,  became  alone  the  real  money,  does 
not  deprive  either  of  those  metals,  whether  in  bars  or  in 
the  form  of  coin,  of  any  part  or  degree  of  the  quality  of 
a  commodity.  The  additional  office  and  function  does 
not  in  the  slightest  degree  change  or  alter  the  previously 
acquired  and  still  retained  offices  and  functions,  any 
more  than  the  attaching  of  an  additional  car  to  a  rail- 
road train  changes  the  office,  function  or  nature  of  the 
earlier  cars  or  of  the  locomotive  engine  drawing  the  train. 
However,  it  can  be  said  in  this  connection,  that  the 
greater  scope  thus  given  to  gold  results  in  making  it 
more  prized;  gives  it  a  higher  measure  of  attributed 
value  than  it  otherwise  would  have.     This  is  artificial 


MONEY  197 

and   in   part   attributable   to   the   private   ownership   of 
the  gold  mines  and  the  machinery  for  mining  gold. 

The  gold  contained  in  the  coin,  outside  of  the  en- 
hanced attributed  value  which  it  gets  by  reason  of  the 
greater  demand  for  it  in  the  market,  neither  takes  on 
nor  loses  a  particle  of  the  other  qualities  which  it  al- 
ready possessed,  by  reason  of  now  being  also  a  legal 
tender.  The  giving  of  another  name  to  the  coin,  calling 
it  a  dollar  or  an  eagle,  is  of  no  especial  significance,  ex- 
cept as  already  stated.  The  gold  coin  that  is  called 
money  will  not  buy  any  more  than  the  metal  contained 
in  the  coin  is  estimated  to  be  worth.  When  offered  in 
large  payments  the  gold  is  weighed,  whether  in  bars 
or  in  the  form  of  coin.  Gold  has  no  other  element  of 
real  value  than  that  contained  in  any  other  article.  That 
is  the  value  imparted  to  it  by  the  expenditure  of  labor 
power  in  its  production.  Yet  under  the  morgan's  system 
of  society,  gold  has  an  unreal  and  varying  value  attribu- 
ted to  it.  It  is  worth  whatever  can  be  gotten  for  it. 
That  is  the  only  pretense  to  a  measure  of  its  attributed 
value  under  the  present  system  of  society.  That  is 
equally  true  of  all  other  commodities.  The  use  of  gold, 
in  coin  or  in  bars,  as  a  purchasing  medium,  that  is,  as 
a  medium  of  exchange,  is  no  different  in  principle  than 
the  use  of  any  other  commodity  disposed  of  in  barter. 
If  you  give  a  gold  coin,  called  a  dollar,  for  a  bushel  of 
wheat,  you  are  merely  trading  gold  for  wheat  and  the 
other  man  is  trading  wheat  for  gold.  It  is  just  as  accu- 
rate for  him  to  say  that  he  bought  a  gold  coin  for  a 
bushel  of  wheat  as  it  is  for  you  to  say  that  you  bought 
a  bushel  of  wheat  for  a  gold  coin.  It  is  a  barter,  and  to 
speak  of  buying  and  selling  is  only  to  inject  different 
names  and  terms.  That  makes  of  it  a  mere  matter  of 
words.  If,  to-morrow,  you  get  two  bushels  of  wheat 
for  one  gold  coin  called  a  dollar,  the  farmer  can  say  that 


198  WHY  THE  CAPITALIST? 

the  gold  was  dear  and  you  can  say  that  the  wheat  was 
cheap ;  or  vice  versa.  For  all  of  that,  the  amount  of 
true  value  contained  in  the  bushel  of  wheat,  as  well  as 
the  amount  of  true  value  contained  in  the  gold  coin,  re- 
mained unchanged. 

The  late  John  P.  Morgan  said  to  a  committee  of  Con- 
gress that  only  gold  is  money.  Having  in  mind  the 
legal-tender  potency  given  by  legislation  to  gold  that  has 
been  inspected  and  tested  by  the  state  and  struck  into 
uniform  pieces  called  coin,  it  may  be  conceded  that 
what  Mr.  Morgan  said  was  entirely  true.  But  it  was 
entirely  technical  also.  Mr.  Morgan  did  not  say  that 
gold  was  the  only  substance  that  could  be  money.  Nor 
could  he  say  it.  Nlo  doubt  he  thought  that  gold  was 
the  best  thing  that  nature  ever  produced  to  serve  as 
money.  That  would  be  merely  his  opinion.  But  the 
state,  through  the  exercise  of  the  same  power  to  decree 
what  substance  shall  be  required  to  discharge  an  obli- 
gation could  just  as  well  make  platinum,  or  copper,  or 
lead,  or  salt  into  money. 

But  in  the  domain  of  political  economy,  yes,  in  the 
everyday  affairs  of  life,  in  the  most  important  and  far- 
reaching  matters,  in  the  things  and  considerations  that 
make  and  destroy  nations  and  sway  society,  and  despite 
all  the  legislation  that  has  ever  been  had,  Mr.  Morgan's 
sage  utterance  fades  into  thinnest  nothingness  when 
met  by  the  effulgence  of  a  most  casual  remark  of  the 
gamin  on  the  street,  who,  on  seeing  a  limousine  drive 
by,  said :  "Dat  old  guy's  got  all  kinds  o'money."  That 
uncouth  child  of  poverty,  with  a  rag  of  human  speech 
found  in  the  gutter,  gave  a  most  cogent  expression  to 
the  essence  of  all  that  there  is  in  money  as  well  as  all 
that  there  is  in  the  whole  field  of  political  economy.  The 
child  did  not  see  any  money,  but  his  expression  told  that 
his  mind  had  taken  note  that  the  man  in  the  limousine 


MONEY  199 

owned  many  things  of  many  kinds,  things  of  attributed 
value,  things  that  were  readily  exchangeable  for  all 
kinds  of  other  things  of  attributed  value ;  that  the  pos- 
session of  all  these  things  gave  the  man  in  the  limousine 
a  great  power  and  enabled  him  to  have  also  huge  sums 
of  money  at  his  command,  else  he  could  not  have  pos- 
sessed the  evidences  of  wealth.  The  power  to  command 
is  all  there  is  in  ownership.  Terms  and  terminology, 
media  and  method,  had  not  yet  darkened  the  child's 
natural  mind.  He  knew  the  what,  though  he  did  not 
know  the  artificial  how  of  the  morgan's  world. 

Gold  long  ago  became  too  cumbersome  and  expensive 
to  serve  directly  and  exclusively  as  a  medium  of  ex- 
change. Gold  therefore  withdrew,  to  a  very  large  ex- 
tent, from  circulation.  In  many  of  the  largest  and  busi- 
est centers,  gold  has  dropped  out  of  circulation  alto- 
gether, appearing  only  for  purposes  of  show  to  make 
Christmas  or  birthday  presents  with,  and  then  retiring 
quickly  again.  Pieces  of  paper,  more  or  less  artistically 
designed,  have  taken  the  place  of  gold  as  a  medium  of 
exchange.  These  are  much  in  the  nature  of  warehouse 
receipts.  Like  gold  coin,  they  pass  ownership  with  de- 
livery. Even  though  they  be  stolen,  the  innocent  taker 
of  them  from  the  thief  for  a  valuable  consideration,  gets 
a  good  title.  This  must  be  so;  trade  demands  it.  The 
paper  also  takes  the  very  name  of  money,  is  redeemable 
in  gold  coin  on  demand  and  circulation  as,  and  per- 
forms all  of  the  offices  of,  a  medium  of  exchange  in  the 
place  of  gold  coin.  This  paper  money  is  much  more 
convenient  to  count,  handle  and  transport,  particularly 
because  of  the  large  denominations  in  which  it  can  be 
issued.  It  does  not  depreciate  by  abrasion.  For  these 
reasons  it  is  much  cheaper.  Everybody  has  confidence 
in  this  paper  money:  everbody  feels  assured  that  it  can 
readily  be  exchanged  for  things  that  are  wanted.     This 


200  WHY  THE  CAPITALIST? 

is  because  it  is  a  favorite  commodity. 

There  is  no  state  law,  and  can  be  no  law  to  compel 
anyone  to  give  up  to  another  anything  that  he  has,  just 
for  money,  paper  or  gold,  or  to  render  service.  The  ex- 
ception that  we  find  as  to  public  corporations  rests  upon 
the  public  franchise  granted  upon  those  conditions.  Ha 
gives  it  up  for  paper  money  because  paper  money  has 
come  to  be  a  medium  of  exchange;  and  he  is  confident 
that  any  number  of  other  people  will  voluntarily  give  up 
to  him  also  other  things  that  they  have  for  this  paper 
money.  So  he  willingly  gives  up  things  he  has  for 
pieces  of  paper,  in  themselves  of  no  practical  value,  be- 
cause he  knows  that  he  can  give  and  others  will  take 
that  paper  in  exchange  for  other  things.  Thus  the  paper 
becomes  a  medium  for  the  exchange  of  other  things  that 
have  or  are  regarded  as  having  value.  These  are  the 
things  that  we  are  really  concerned  about  and  wish  to 
exchange.  The  paper  money  facilitates  the  exchange 
and  that  is  the  only  reason  why  we  care  for  the  paper 
money. 

It  is  true  that  the  efficiency  of  paper  as  a  medium  of 
exchange  is  dependent  entirely  upon  confidence.  That 
is  true  of  every  medium  of  exchange.  It  is  true  of  gold. 
It  is  true  of  every  commodity.  Let  gold  lose  its  power 
to  get  other  things  in  exchange  and  it  will  cease  at  once 
to  be  a  medium  of  exchange.  Let  a  mountain  of  pure 
gold  suddenly  appear  and  gold  coin  will  at  once  be  re- 
fused by  all  who  have  things  to  sell  until  the  mountain 
becomes  private  property,  the  output  of  gold  restricted 
and  the  fad  for  gold  revived.  As  to  commodities  in  gen- 
eral, it  is  safe  to  say  that  the  merchant  would  never 
lay  in  a  stock  if  he  were  not  confident  that  somebody 
will  again  buy  enough  of  it  from  him  so  as  to  give  him  a 
profit. 

As  long  as  confidence  in  paper  money  is  maintained. 


MONEY  201 

it  will  perform  its  work  of  transferring  attributed  values 
back  and  forth.  Destroy  that  confidence  and  the  paper 
will  no  longer  do  its  work.  That  confidence  is  now 
upheld  by  keeping  on  hand  a  very  small  amount  of 
gold  compared  to  the  paper  and  other  token  money  in 
the  shape  of  silver,  nickel  and  copper  coin  that  it  must 
secure.  This  modicum  of  gold  holders  of  paper  money 
may  see  if  they  have  a  mind  to.  They  can  also  take  it 
if  they  really  want  it  for  their  paper  money,  provided, 
however,  that  there  are  not  too  many  that  want  it. 
But,  practically,  no  person  wants  it.  A  much  smaller 
quantity,  say  one  per  cent,  would  answer  under  such 
conditions.  In  fact,  if  nobody  wants  the  gold,  there  is 
no  good  reason  why  a  single  gold  coin  should  not  answer 
every  purpose,  so  long  as  the  policemen  could  keep  the 
line  in  order  as  the  people  file  past  to  have  a  look  at  their 
gold! 

Anything  else  of  attributed  value  would  answer  the 
same  purpose  just  as  well.  Platinum  would  do,  or  wheat, 
or  corn,  or  cotton  would  do,  whether  in  the  raw  state  or 
manufactured,  i.  e.,  coined;  brick  and  stone,  and  steel 
would  do ;  steel  rails,  steel  wheels  or  other  wheels  would 
do;  houses,  railroads,  steamships,  mills,  mines  or  farms, 
would  do ;  bread  or  meat,  clothing  or  shoes  would  do.  It 
would  be  only  a  matter  of  keeping  these  articles  on  hand 
and  up  to  their  full  attributed  value.  We  shall  see  how 
this  is  actually  done  at  present  when  we  come  to  con- 
sider the  subject  of  banking.  All  of  those  forms  and 
things  of  attributed  value,  perform  to-day  the  office  and 
function  of  giving  and  upholding  confidence  in  another 
medium  of  exchange  so  extensive  in  its  reach  and  im- 
portance that  money  as  a  medium  of  exchange  is  a  puny 
thing  in  comparison.  All  the  gold  in  all  the  vaults  plays 
a  comparatively  small  role  as  a  medium  of  exchange 
to-day.     But  this  relates  to  banking  and  we  shall  take 


202  WHY  THE  CAPITALIST? 

that  up  in  another  chapter.  To  say  that  values  to  be 
exchanged  cannot  give  security  to  paper  by  which  the 
exchanges  are  affected  is  an  absurdity.  Exchangeable 
values  are  the  principals.  Gold  coin  is  simply  the 
deputy,  functioning  as  a  medium  of  exchange  to  support 
and  inspire  confidence  in  paper  acting  as  another  medium 
of  exchange.  The  deputy  is  skipped  in  the  largest  trans- 
actions every  day  and  many  times  every  day  so  far  as  his 
claim  to  act  as  a  medium  of  exchange  is  concerned. 

It  would  be  an  unjustified  assertion  to  say  that  the 
principal  values  that  are  themselves  exchanged  by  the 
use  of  media  of  exchange  cannot  be  readily  transferred 
or  divided  up  into  the  necessary  fragments  required  by 
trade.  The  fact  is  that  trade  does  not  require  the  kind 
of  handling  and  dividing  up  that  would  here  be  inferenti- 
ally  claimed.  It  is  a  long  time  since  we  have  used  gold 
dollars  in  business.  The  smallest  gold  coin  ordinarily 
seen  is  the  five-dollar  piece.  Yet  we  have  had  no  diffi- 
culty in  spending  less  than  five  dollars  at  a  time.  The 
man  who  has  only  one  copper  cent  cannot  redeem  it  in 
gold.  Before  he  can  do  that  he  will  have  to  get  499 
other  copper  cents,  with  which  to  get  a  five  dollar  gold 
coin. 

Aside  from  the  artificial  and  law-supported  legal  ten- 
der aspect  of  it,  money  is  being  fast  reduced  to  a  single 
one  of  the  four  separate  and  distinct,  naturally  acquired, 
functions.  It  is  being  more  and  more  restricted  in  scope 
to  the  function  of  a  standard  for  admeasuring  attributed 
values.  It  is  a  poor,  wavering  and  fluctuating  standard 
at  that,  and  it  is  becoming  worse  all  the  time.  It  is  a 
yardstick  of  very  changeable  length,  for  the  most  part 
contracting  to  a  shorter  reach.  In  the  very  poorest  of 
fashions,  money  is  used  as  a  means  of  admeasuring  the 
attributed  values  of  commodities  brought  into  exchange 
after  the  manner  established  by  trade.     The  reason  for 


MONEY  203 

this  is  that  real  values  are  not  admeasured.  Only  the 
fictitious  values  of  commodities  are  admeasured.  The 
value  in  an  article  consists  of  the  average  time  of  simple 
labor  power  necessarily  expended  in  the  social  produc- 
tion of  that  kind  of  an  article.  This  could  easily  be 
standardized  under  a  sane  and  reasonable  social  system, 
if  it  were  deemed  desirable.  But  under  our  present  social 
chaos  there  is  no  standard  of  valuation.  Everything  is 
in  the  market  scramble.  That  is  the  theory  of  "values" 
under  the  morgan.  The  greatest  dishonesty  attends  the 
practice  of  even  that  theory.  The  morgan,  who  holds 
and  controls  the  resources  of  nature  and  the  means  of 
production,  does  not  scramble.  He  sits  tight.  He  can 
be  dignified  and  respectable.  The  scrambling  is  done 
by  those  who  are  compelled  to  get  a  living.  The  morgan 
has  control  of  the  yardstick  called  money.  He  can 
make  the  yard  a  long  one  or  a  short  one  as  he  likes. 
It  is  to  his  interest  to  make  it  grow  constantly  shorter. 
To  have  things  dear  suits  his  purpose.  All  the  move- 
ments of  the  morgan  are  masked  and  the  gentiles  in  their 
strivings  and  competitions  have  their  attention  drawn 
away  from  the  points  of  their  expropriation  and  their 
exploitation,  and  are  worn  out  in  senseless  contentions 
over  the  money  prices  of  commodities. 


CHAPTER  XVIII. 
THE  BANK  AS  AN  AGENCY  OF  EXCHANGE. 

The  two  functions  of  money  (a)  that  of  a  medium  of 
exchange  and  (b)  that  of  a  measure  of  attributed  values 
are  both  products  of  evolution.  But  evolution  never 
stops.  It  is  constantly  sloughing  off  and  modifying  the 
old  and  at  the  same  time  adding  the  new,  changing  the 
emphasis,  transferring  the  importance  from  one  feature 
to  another,  until  the  object  appears  as  something  new. 
Yet  the  new  comes  in  on  us  in  such  a  way  that  it  is 
likely  to  be  unnoticed  in  the  coming. 

The  corporeality  of  money — true  money,  gold,  as  our 
financiers  say — long  ago  began  to  decline  in  its  activity 
as  the  medium  of  exchange,  leaving  that  office  to  be  per- 
formed more  and  more  by  the  servants  called  tokens  or 
money.  In  time  these  servants  had  to  begin  to  give 
way  also.  There  were  too  many  of  them.  '1  ne  entourage 
became  too  large,  unwieldy,  blatant  and  vulgar.  So 
even  paper  money  became  too  bothersome.  It  required 
too  much  work  to  count  and  carry  and  protect  against 
thieves,  fire,  and  dirt  and  germs.  It  is  too  much  exposed 
to  the  danger  of  being  lost.  If  lost  or  stolen  the  title  of 
it  will  be  gone  as  soon  as  it  gets  into  the  hands  of  inno- 
cent holders.  It  cannot  be  pursued  by  the  owner  op 
retaken  from  innocent  holders  who  have  in  good  faith 
parted  with  value  for  it,  as  can  be  done  in  the  case  of 
a  lost  or  stolen  coat  or  horse.  And  lastly,  but  by  no 
means  unimportant,  the  handling  of  money  in  consider- 
able sums  has  lost  the  flavor  of  fashion.  The  odor  has 
become  tiresome,  as  it  were,  and  even  offensive.  It  has 
long  since  come  to  be  very  much  more  within  the  canons 

204 


THE  BANK  AS  AN  AGENCY  OF  EXCHANGE  S05 

of  style  and  respectability  to  make  quittances  and  ex- 
change of  value  by  means  of  checks  on  the  bank.  It  is 
considered  quite  rustic  and  boorish  to-day  for  one  in- 
dividual to  pay  over  to  another  any  considerable  sum  of 
money,  be  it  gold  or  paper.  It  has  gotten  to  be  quite  the 
formula  in  preparing  to  close  real-estate  transactions  to 
ask :  "Would  you  prefer  cash  or  a  certified  check  ?"  and 
the  answer  almost  invariably  is:  "A  certified  check,  by 
all  means,  if  you  please" ;  or  a  draft  on  New  Yerk  or  some 
other  financial  center  is  asked  for. 

Those  of  us  who  enjoy  the  confidence  of  the  landlord 
and  the  shop-keeper  prefer  to  make  our  quittances  by 
means  of  checks  on  the  bank,  and  we  look  with  pity  upon 
the  line  of  worn  faces  and  bent  backs  at  the  tax  gatherer's 
window  awaiting  their  turn  to  pay  their  taxes  or  water 
bills  in  cash.  A  check  on  a  bank  is  so  much  easier, 
quicker  and  safer,  both  to  the  remitter  and  the  receiver, 
and  it  adds  much  more  to  one's  prestige  than  the  hand- 
ling of  dirty  money. 

The  payee  deposits  the  checks  received  by  him  during 
the  day  in  his  bank  in  the  vast  majority  of  instances. 
If  his  bank  is  the  one  on  which  the  check  is  drawn,  the 
amount  is  written  on  the  credit  side  of  the  payee's  ac- 
count and  on  the  debit  side  of  the  drawer's  account  and 
that  transaction  is  thus  closed.  If  the  check  is  drawn 
on  some  other  than  the  payee's  bank  the  payee  deposits 
it  in  his  own  bank  in  exactly  the  same  manner.  The 
clerk  in  the  payee's  bank  gathers  up,  assorts  and  tabu- 
lates all  the  checks  on  other  banks  received  in  this  way 
and  sends  them  every  day  to  an  appointed  place  at  an 
appointed  time  where  the  messenger  meets  like  mes- 
sengers from  other  banks  in  the  same  city  or  district.  It 
is  of  no  importance  where  this  place  is.  It  could  be  in  a 
bar-room  or  on  the  street  corner.  It  is  usually  in  some 
convenient  place  and  is  called  the  clearing  house.     The 


20G  WHY  THE  CAPITALIST? 

name  is  purely  technical  and  is  a  blind.  Most  people 
do  not  understand  what  is  meant  by  it.  The  name 
recommends  itself  as  a  convenient  thing  to  confuse  the 
minds  of  the  uninitiated.  It  is  part  of  the  morgan 
system  to  give  confusing  names  to  things.  This  so- 
called  clearing  house  is  nothing  but  a  swapping  place 
and  it  ought  to  be  so  designated.  People  not  informed  in 
such  matters  would  not  then  get  false  impressions  from 
a  hollow  high-sounding  name. 

When  the  different  bank  messengers  meet  at  the 
swapping  house  they  simply  swap  shecks,  each  one  re- 
ceiving from  the  other  the  checks  drawn  on  his  own 
bank.  Each  takes  the  checks  so  received  back  to  his 
own  bank.  There  the  checks  are  verified.  Then  their 
respective  amounts  are  written  on  the  debit  side  of  the 
accounts  of  the  respective  drawers,  if  the  amount  on 
the  credit  side  is  not  thereby  exceeded.  If  the  credit 
side  is  not  good  for  the  amount,  the  check  is  sent  back 
dishonored  to  the  bank  from  which  it  was  received  in  the 
swapping  process,  unless  the  bank  officer  regards  the 
drawer  as  of  sufficient  financial  responsibility  to  honor 
the  check  on  the  drawer's  general  credit.  In  the  latter 
case  the  check  is  charged  to  the  account  of  the  drawer 
who  is  notified  of  the  resulting  shortage  in  his  account. 
This  shortage  is  called  an  overdraft. 

A  clerk  in  each  bank  computes  the  sum  ot  the  checks 
received  daily  by  way  of  the  clearing  house.  The  sums 
of  the  different  consignments  of  such  checks  are  set  off 
against  the  sums  of  the  checks  on  the  other  banks, 
respectively.  When  that  is  done  each  bank  owes  or  has 
a  claim  for  whatever  difference  may  be  found  to  remain. 
Each  bank  may  be  owing  a  balance  to  one  or  more  of 
the  other  banks.  At  the  same  time  it  may  have  one  or 
more  balances  coming  to  it  from  still  other  banks  in  the 
swapping  combination.    These  balances  may  be  paid  off 


THE  BANK  AS  AN  AGENCY  OF  EXCHANGE  20T 

by  checks  or  orders  given  on  debtor  banks  and  so  ad- 
justed through  further  credit  and  debit  entries,  or 
through  a  system  of  orders  on  a  common  fund  main« 
tained  by  the  banks  that  are  parties  to  the  swapping 
arrangement.  These  orders  on  the  common  fund  are 
called  clearing  house  certificates. 

The  Pujo  Committee  of  the  House  of  Represenatives 
in  its  report  speaking  of  this  simple  swapping  arrange- 
ment of  the  banks,  says:  "At  the  beginning  of  every  busi- 
ness day  each  member  presents  at  the  clearing  house  all 
checks  against  other  members  deposited  with  it  up  to 
the  close  of  business  of  the  preceding  day.  Accounts  are 
stated  and  in  the  afternoon  every  debtor  member  brings 
the  amount  due  from  it  to  other  members  to  the  clearing 
house,  which  on  the  same  day  pays  it  over  to  the  credi- 
tor. The  advantage  of  this  system  over  the  archaic 
practice  of  each  bank  separately  making  its  collection 
over  the  counter  from  every  other  bank  is  incalculable. 

"To  reduce  the  risk  and  labor  of  daily  carrying  through 
the  streets  large  amounts  of  money  necessary  to  pay  the 
balances  due  from  and  to  each  other  the  members  of  the 
clearing  house  association  deposit  with  it  coin  and  cur- 
rency other  than  bank  notes  and  in  return  receive  certifi- 
cates in  stated  denominations  payable  to  any  member. 
These  are  used  by  members  in  settling  with  each  other  at 
the  clearing  house." 

Thus  we  see  that  the  banks  have  in  actual  practice  and 
effect  become  to  a  very  large  extent  the  method  and  ma- 
chinery of  swapping  attributed  values  during  the  periods 
of  normal  business  activity,  and  that  the  clearing  house 
is  simply  a  place  where  the  swapping  system  is  extended 
and  made  more  effective. 

As  a  result  of  all  this,  a  relatively  small  amount  of  money 
is  used  as  a  medium  of  exchange.  Money  has  to  that 
extent  lost  the  function  of  a  medium  of  exchange.     This 


208  WHY  THE  CAPITALIST? 

function  is  accordingly  being  supplanted  by  the  swapping 
of  attributed  values  through  the  banks  and  their  extended 
swapping  combinations  called  clearing  house  associations. 

Only  the  terms  of  money  remain  to  function  as  measures 
of  attributed  values.  The  great  volume  of  exchange  of 
attributed  values  is  effected  by  means  of  a  system  of  book- 
keeping operated  by  a  corps  of  poorly  paid  laborers  of 
little  skill  or  understanding,  in  the  employ  of  the  banks 
and  clearing  houses. 

The  extent  to  which  attributed  values  are  exchanged 
without  the  use  of  money,  that  is,  through  offsetting  of 
accounts,  is  in  a  measure  indicated  by  the  report  of  the 
Pujo  Committee.    That  report  says: 

"In  1911  checks  to  the  amount  of  $92,420,120,091,  aver- 
aging $305,016,897.99  daily,  were  collected  through  the 
New  York  Clearing-House  Association.  This  required  but 
half  or  three-quarters  of  an  hour  morning  and  afternoon 
and  the  use  of  but  $4,388,563,113.05  of  actual  money,  aver- 
aging $14,483,706.64  daily,  thus  requiring  the  exchange  of 
but  4.7  per  cent  of  the  money  that  would  otherwise  be 
involved  in  these  transactions." 

Thus  over  95  per  cent  of  this  vast  aggregation  of  ex- 
change of  values  was  affected  by  a  direct  swapping  of 
credits  in  the  various  banks,  all  done  by  clerks  perform- 
ing merely  routine  services.  The  remainder,  as  we  have 
already  seen  from  the  quotation  from  this  committee,  was 
also  adjusted  by  a  further  swapping  of  credits  on  the 
books  of  the  clearing  house  by  means  of  clearing  house 
certificates. 

The  report  of  the  United  States  Comptroller  of  the  Cur- 
rency for  1912,  page  774,  gives  a  comprehensive  statement 
of  the  transactions  of  the  New  York  Clearing  House,  year 
by  year,  from  1854  to  1912.  This  statement  is  valuable 
in  showing  the  p'lonomenal  growth  of  the  system  of  swap- 
ping attributed  values  through  simple  bank  book-keeping, 


THE  BANK  AS  AN  AGENCY   OF  EXCHANGE 


209 


and  the  small  amount  of  cash  required  to  adjust  balances. 
To  illustrate,  it  is  sufficient  to  take  the  five  year  periods : 

Average         Percentage 

Daily  of  Bal.  to 

Year.  Clearings.  Clearings.         Clearings. 

l854    $5,750,455,987  $19,104,505  5-17 

1859    6,448,005,956  20,867,333  5.64 

1864    24,097,196,656  77,984455  1&7 

1869    37,407,028,987  121,451,393  2.99 

1874    22,855,927,636  74,692,574  5.62 

1879  25,178,770,691  84,015,540  5.56 

1884    34,092,037,338  1 1 1,048,982  4.47 

1889  34,796,465,368  1 14,839,820  5.05 

1894  24,330,145,366  79,704,426  6.54 

1899  57.368,230,771  189,961,029  5.37 

1904  59,672,796,804  195,648,514  5.20 

1909  99,257,662,41  r  326,505,468  4.22 

1912  96,672,300,864  319,050,498  5.22 

The  Comptroller,  on  page  7T6  of  this  report,  gives  a 
comparative  statement  of  the  clearing  houses  of  the 
United  States,  151  in  number,  for  the  years  1911  and  1912. 
From  this  it  appears  that  the  clearings  for  1911  were 
$159,508,005,000,  and  for  1912,  $168,506,362,000,  an  in- 
crease of  $8,998,357,000. 

Besides  the  foregoing  clearing  house  transactions,  there 
is  the  great  number  of  transferences  of  attributed  values 
back  and  forth  by  checks  where  the  payee  deposits  his 
check  in  the  bank  on  which  it  is  drawn.  These,  of  course, 
do  not  have  to  be  swapped.  They  fulfill  their  mission  the 
moment  they  are  credited  to  the  payee  on  the  bank's  books 
and  debited  to  the  drawer. 

A  bank  check  is  a  very  simple  document  upon  its  face. 
Its  words  are  very  simple  and  in  themselves  not  calculated 
to  deceive.  "To  the  Big  National  Bank:  Pay  to  the  order 
of  John  Jones,  One  Hundred  Dollars,"  dated  and  signed. 
Surely  such  an  innocent  looking  instrument  should  not 
be  the  ground-work  of  any  deception  upon  anybody.     As 


210  WHY  THE  CAPITALIST  ? 

between  the  immediate  parties  to  the  instrument  it  is  not. 
As  to  its  effect  upon  the  general  understanding  of  banks 
and  banking  it  is  most  misleading.  It  is  an  extremely 
technical  instrument.  Based  upon  what  we  now  know 
about  the  clearing  house,  it  is  intrinsically  correct  to  the 
extent  of  less  than  five  per  cent.  Only  five  per  cent  of  it, 
on  an  average,  is  paid  by  the  bank.  The  remaining  95 
per  cent  is  credited  to  the  payee  on  the  bank's  books.  No 
money  whatever  having  changed  hands. 

If  the  checks  were  in  some  such  words  as  these:  "To 
the  Big  National  Bank :  Credit  John  Jones  with  an  amount 
of  value  expressed  in  terms  of  money  as  One  Hundred 
Dollars  and  charge  my  account  with  the  same  amount ; 
or  if  Mr.  John  Jones  becomes  distrustful  of  the  banks, 
then  hand  to  him  the  amount  of  his  claim  in  money  and 
let  him  go,"  dated  and  signed,  it  would  express  the  true 
nature  of  commercial  banking.  That  is  what  it  amounts 
to  in  practice.  In  over  95  per  cent  of  these  check  transac- 
tions, measured  in  dollars,  John  Jones  is  simply  credited 
with  the  amount  of  his  check,  and  the  drawer  of  the  check 
debited,  and  in  less  than  five  per  cent  of  them,  also  meas- 
ured in  dollars,  does  John  Jones  demand  the  money.  There- 
fore, money  serves  as  a  medium  of  exchange  in  less  than 
five  per  cent  of  the  bank's  transactions.  In  more  than  95 
per  cent  of  them  the  attributed  values  are  transferred  by 
means  of  the  instrumentalities  of  the  bank  and  without 
any  money  functioning  as  a  medium  of  exchange.  The 
office  of  money  is  only  that  of  admeasuring  attributed 
values. 

It  has  become  one  of  the  strong  canons  of  business  ethics 
to  trust  trie  banker  implicitly  and  not  to  call  for  the  actual 
cash  to  any  greater  extent  than  is  absolutely  necessary. 
This  ethical  teaching  is  being  constantly  impressed  upon 
everybody  reachable. 

The  result  of  the  development  of  banking  and  the  general 


THE  BANK  AS  AN  AGENCY  OF  EXCHANGE  211 

confidence  in  the  banker  is  that  ordinarily  the  volume  of 
trading  through  the  swapping  methods  afforded  by  the 
system  of  banks  and  clearing  houses  so  far  as  any  estimate 
can  be  made  is  about  twenty  times  the  amount  effected  by 
the  passing  of  money  as  a  medium  of  exchange.  This  is 
certainly  a  great  advance  in  efficiency.  One  would  think- 
that  the  immense  saving  would  redound  to  the  direct  benefit 
of  those  owning  the  industries,  the  shops  and  the  market 
places.    But  it  does  not. 

The  morgan  in  the  guise  of  the  banker  has  appropriated 
this  method  and  machinery,  evolved  by  the  whole  human 
family,  and  uses  it  most  effectually  in  exploiting  the  ex- 
ploiters. It  has  resulted  in  this,  that  the  banker  not  only 
"does  business"  on  a  much  larger  amount  of  other  people's 
money,  but  the  business  that  he  can  do,  if  not  restrained, 
by  dealing  in  mere  money  terms  amounts  to  about  twenty 
times  the  amount  of  money  he  actually  uses  or  has.  Of 
course,  the  actual  proportion  can  not  be  arrived  at.  A 
reliable  inkling  of  it  is  afforded,  however,  by  the  testi- 
mony of  the  bankers  before  the  Pujo  Committee,  from 
whose  report  quotations  have  herein  already  been  made, 
and  by  the  report  of  the  United  States  Comptroller  of  the 
Currency. 

It  is  not  at  all  to  be  wondered  at  that  the  morgan  as 
banker,  together  with  all  of  his  servile  press,  turned  all  of 
the  batteries  against  the  Pujo  Committee. 


CHAPTER  XIX. 

COMMERCIAL  BANKING— THE  EXPLOITATION 
OF  THE  EXPLOITER. 

The  swapping  of  attributed  values  constitutes  by  far  the 
greater  part  of  modern  commercial  banking.  It  consti- 
tutes about  95  per  cent  of  it. 

If  the  customers  of  the  commercial  banks  were  to  collect 
into  one  place  under  their  own  control  a  sufficient  amount 
of  money  to  cover  the  five  per  cent  approximately  that  is 
really  needed  to  effect  the  swap  of  attributed  values,  deposit 
their  securities  in  the  amount  required  to  maintain  the 
needed  confidence  and  hire  a  corps  of  competent  clerks  to 
keep  the  books  and  act  as  tellers  and  cashiers,  the  morgan 
would  be  dethroned  as  banker.  There  would  be  no  more 
discounting  of  business  in  favor  of  the  morgan  for  his 
so-called  brain  work  in  the  running  of  a  bank.  The  man 
in  charge  of  a  bank  would  then  find  himself  in  the  position 
of  a  clerk  getting  a  clerk's  pay. 

The  customers  would,  by  such  a  proposition,  be  taking 
for  themselves  the  benefits  resulting  from  the  evolution 
in  trade  and  exchange  that  has  followed  down  through  the 
ages.  Such  an  arrangement  would  put  the  banker  on  a 
wage  basis.  It  would  mean  putting  him  where  his  clerks 
and  trotters  and  tellers  are  now,  namely,  upon  a  basis 
where  he  could  expect  to  receive  for  his  work  only  enough 
to  enable  him  to  live  in  the  station  in  life  which  he  occu- 
pied, and  that  station  in  life  would  be  the  station  of  a  clerk. 

Such  a  proposition  on  the  part  of  the  public  would  mean 
the  abrogation  of  private  ownership  of  the  method  and 
agency  of  exchange  that  has  been  evolved  by  our  fathers, 
and   still  is  being   further  evolved  by  the  community   at 

212 


THE  EXPLOITATION  OF  THE  EXPLOITER  213 

large.  It  would  mean  that  there  would  no  longer  be  the 
paying  of  huge  sums  to  morgan  bankers  for  that  which  is 
already  our  own  and  always  has  been  our  own.  It  would 
mean  that  the  discount  business  would  be  ended.  It  would 
mean  that  there  would  no  longer  be  any  pretense  of  loaning 
where  nothing  is  being  loaned,  where  there  is  nothing  to 
loan  and  where  no  loaning  is  necessary. 

At  present  a  merchant  or  manufacturer  goes  to  a  bank 
"for  a  line  of  credit."  He  already  has  the  credit.  If  he 
has  not,  then  he  might  save  himself  the  trouble  of  going 
to  the  bank.  He  has  credit  in  goods,  machinery,  material 
or  prospects,  singly  or  in  combination.  In  order  to  go  to 
the  banker  he  must  first  have  quick  assets,  that  is,  he  must 
have  assets  that  can  be  disposed  of  quickly  for  money  when 
his  note  matures,  if  not  taken  up  by  him  at  once.  This 
is  the  credit  he  must  have  to  trade  on ;  that  is  the  credit 
the  banker  does  business  on.  This  merchant  or  manufac- 
turer gives  his  note  to  the  banker,  say  for  $10,000.00  for 
three  months.  The  morgan  banker  knows  that  Mr.  M.  is 
perfectly  "good"  for  that  amount,  or  he  turns  to  his  mer- 
cantile agency  reports  and  ascertains  that  fact,  with  no 
more  brain  work  than  it  takes  to  open  a  dictionary  to  ascer- 
tain the  meaning  of  a  word. 

The  banker  then  takes  up  a  printed  discount  table,  on 
which  he  finds  the  amount  of  the  discount  all  computed  for 
him  ready  at  hand,  or  he  presses  a  button  or  two  on  a  little 
machine  and  the  machine  tells  him  the  exact  amount  of 
the  discount,  subtracts  it  from  the  face  of  the  note  and 
gives  the  remainder  in  plain  figures. 

Assume  that  the  morgan  banker  is  moderate  and  shaves 
off  only  the  amount  given  by  a  strict  discount,  leaving  the 
proceeds  of  the  note  $9,850.00.  The  morgan  banker  does 
not  hand  over  to  Mr.  M.  $9,850.00  in  cash.  The  morgan 
banker  would  not  want  that.  That  would  not  be  banking. 
The  public  believes,  however,  that  the  transaction  amounts 


214  WHY  THE  CAPITALIST  ? 

to  that  in  substance.  But  it  does  not.  What  the  morgan 
banker  does  is  to  write  into  the  pass  book  of  Mr.  Merchant 
or  Manufacturer  credit  of  $9,850.00  and  make  out  a  slip 
directing  the  book-keeper  to  write  into  the  ledger  a  similar 
credit  for  Mr.  M.,  and  he  calls  Mr.  M.'s  attention  to  the 
rule  of  the  bank  that  the  account  must  not  be  drawn  lower 
than  $500.00.  Mr.  M.  may  think  that  he  has  received  a 
loan.  But  he  has  not.  He  has  now,  it  is  true,  something 
which  is  just  as  good  as  a  loan,  in  fact  better  than  a  loan, 
because  in  a  safer  and  more  convenient  form.  Mr.  Mer- 
chant or  Manufacturer  returns  to  his  shop  or  factory  and 
in  the  course  of  his  business  draws  checks.  By  the  time 
the  three  months  are  up,  if  the  average  is  preserved,  there 
will  not  have  been  actually  paid  out  any  more  than  $492.50 
by  the  bank,  all  told,  on  this  so-called  loan.  Nor  will  even 
this  small  amount  have  been  paid  out  at  one  time,  or  have 
remained  out  of  the  bank  for  any  considerable  time.  For 
be  it  remembered  that  some  of  the  checks  given  by  Mr.  M. 
are  again  deposited  by  the  payee  in  the  same  bank.  Of 
the  proportion  so  applied  we  have  no  direct  or  exact  means 
of  knowing.  We  have  been  told  only  about  the  clearing 
house  swapping  and  that  in  these  it  takes  less  than  five 
per  cent  to  adjust  balances  in  money.  Be  it  also  remembered 
that  if  any  of  this  account  is  drawn  out  of  the  bank  in 
actual  cash  for  pay-rolls,  it  is  but  a  very  few  days  before 
it  is  back  in  the  bank  again.  Be  it  also  remembered  that 
Mr.  M.  is  in  business  and  is  receiving  checks  and  deposit- 
ing them  every  day,  and  that  the  banker  has  the  benefit  of 
these  checks  also. 

In  view  of  all  the  circumstances  it  is  fair  to  assume  that 
the  facts  furnished  by  the  United  States  Comptroller  of 
the  Currency,  showing  that  less  than  five  per  cent  of  the 
banking  transactions  that  go  through  the  swapping  house 
have  to  be  adjusted  in  money  payments,  give  a  fair  es- 


THE  EXPLOITATION  OF  THE  EXPLOITER  215 

timate  of  that  which  is  called  real  money,  that  which  act- 
ually changes  hands  in  banking  transactions. 

We  see  from  the  foregoing  that  the  morgan  banker  in 
the  transaction  gets  $150.00  for  a  little  simple  book-keeping, 
plus  the  possible  use  of  a  small,  unascertainable  amount  of 
cash,  well  within  $492.50.  If  we  assume  that  the  actual 
expense  to  the  banker  for  the  operation  of  the  system  in 
this  one  transaction  be  $10.00,  which  is  a  fair  estimate 
under  present  conditions  and  standards  for  an  ordinary 
kind  of  routine  work,  then  the  remaining  $140.00  represents 
interest  that  is  paid  for  the  use  of  less  than  $492.50  during 
a  period  of  three  months.  If  the  whole  of  this  $492.50 
were  continuously  out  of  the  bank  during  the  three  months, 
it  would  make  the  rate  of  interest  amount  to  113.7  per 
cent  per  annum.  But  if  we  strike  an  average,  we  shall 
find  that  the  mean  amount  of  money  coming  into  actual 
use  does  not  exceed  one-half  of  the  amount  stated.  That 
would  make  the  rate  of  interest  227.4  per  cent.  Nor  does 
the  modicum  of  money  so  put  into  actual  use  to  make  good 
the  "line  of  credit"  belong  to  the  morgan  banker,  as  we 
have  already  seen.  It  is  the  money  of  his  customers  de- 
posited with  him.  He  pays  a  low  rate  of  interest,  four 
per  cent  and  under  for  some  of  it.  For  much  of  it  he  pays 
nothing  at  all.  It  is  simply  the  case  again  of  the  morgan 
baron  of  the  feudal  ages  availing  himself  of  the  strength 
and  substance  of  one  set  of  serfs  to  fleece  another  set  of 
serfs  and  vice  versa,  and  upon  occasion  to  beat  down  a 
rival. 

The  foregoing  considerations,  of  course,  do  not  include 
any  consideration  of  the  bonuses,  etc.,  that  otherwise  might 
be  taken  by  the  banker  in  other  ways,  of  which  there  is 
no  authentic  or  approximately  accurate  information  avail- 
able. The  extent  of  the  banking  business  at  the  rates  and 
under  the  conditions  above  set  forth  is  enormous,  and  pre- 
sents to  us  in  the  large  banker  the  apotheosis  of  the  morgan. 


216  WHY  THE  CAPITALIST? 

SuHy  the  statements  of  any  typical  American  bank,  which 
may  be  had  on  every  hand,  given  out  to  advertise  the  bank, 
statements  that  very  few  read  closely  and  scarcely  any  can 
understand  because  they  do  not  take  the  time  to  study  the 
true  nature  of  banking.    Take  this  one : 

LIABILITIES. 

Capital    $  500,000.00 

Surplus    500,000.00 

Profits  68,380.24 

Deposits   7,788,784.87 

$8,857,165.11 

RESOURCES. 

Bank  building   $   300,000.00 

U.  S.  and  other  bonds 1,363,65775 

Time  loans   4,164,971.09 

Demand  loans   1,574,580. 16 

Cash  on  hand  and  in  banks 1,453,956.00 


$8,857,165.11 
Here  we  start  with  what  the  bank  calls  capital  of  $500,- 
000.00.  Of  this  there  is  $300,000.00  invested  in  the  bank 
building.  That  is  a  permanent  investment  made  because 
it  is  well  understood  that  that  money  will  not  be  needed 
for  direct  use  in  the  banking  business.  It  will  not  be  loaned 
out.  The  banking  house  is  made  as  showy  as  might  be, 
for  advertising  purposes. 

Then  we  have  the  investment  in  United  States  and  other 
bonds  amounting  to  $1,363,675.75.  This  is  also  in  the 
nature  of  a  permanent  investment,  though  not  so  much  so 
as  that  of  the  building.  We  are  not  told  how  much  is  in 
other  bonds.  The  former  are  very  readily  salable,  and  the 
latter  we  might  assume  are  also  such  that  can  be  sold  in 
a  fairly  short  time  if  need  be.    These  represent  an  invest- 


THE  EXPLOITATION  OF  THE  EXPLOITER  217 

ment  of  money  for  which  there  is  no  immediate  need  and 
no  probable  need  at  any  time  in  the  banking  business.  The 
money  is  put  into  these  as  a  readily  liquidated  investment 
so  as  to  have  it  "earning  something"  and  yet  be  available 
in  fairly  short  order  in  case  of  a  run  or  any  other  emer- 
gency. 

The  next  investment  we  see  is  in  "time  loans"  so-called 
on  commercial  paper,  the  "discounts."  This  is  THE  bank- 
ing business,  the  big  game,  as  it  were.  95  per  cent  of  this 
and  over  represents  that  portion  of  attributed  values  that 
is  written  from  one  account  to  another  on  the  bank's  books, 
from  debits  to  credits,  and  from  credits  to  debits  on  the 
individual  ledgers  of  the  bank.  The  other  five  per  cent, 
we  still  allow,  is  the  amount  that  sometimes  leaves  the  bank 
and  then  soon  comes  back  again,  settling  the  differences 
arising  in  the  swapping  of  checks.  Most  of  them  are 
known  as  the  transactions  "through  the  clearing  house." 

These  time  loans  are  included  in  the  deposits  set  out  in 
the  bank's  published  statements,  and,  except  there  be  a 
run  on  the  bank,  not  more  than  five  per  cent  of  them  leave 
the  deposit  accounts  of  one  or  another  customer,  or  are 
made  the  basis  of  any  demand  for  "cash."  This,  of  course, 
remains  true  notwithstanding  the  writing  back  and  forth 
from  one  account  to  another  in  the  bank. 

Next  we  have  the  so-called  "demand  loans."  These  also 
are  mere  entries  on  the  books  of  the  bank  to  be  transferred 
back  and  forth — that  is,  to  the  extent  of  about  95  per  cent 
of  them.  They  differ  from  the  time  loans  in  being  termin- 
able, that  is,  payable  on  demand,  and  for  that  reason  bring 
to  the  banker  a  little  lower  rate  of  toll  called  interest.  These 
demand  "loans"  in  actual  practice  run  longer,  however, 
than  the  time  "loans"  do. 

The   bankers,   naturally,    would   rather  have    their    ma- 


218  WHY  THE  CAPITALIST? 

chinery  running  to  its  full  capacity  on  time  "loans,"  that 
is,  on  commercial  paper  of  30  or  60  or  90  days,  because  the 
rates  are  higher.  But  as  the  capacity  of  this  banking  ma- 
chinery is  so  enormous,  the  time  "loan"  business  cannot 
fully  occupy  it  without  increasing  very  materially  the  clan- 
ger of  a  run  on  the  bank  and  likewise  increasing  the  danger 
of  augmenting  very  much  the  disastrous  results  of  a  pos- 
sible run.  So  the  banks  take  on  a  quantity  of  these  demand 
"loans"  and  carry  them  on  the  books  indefinitely.  In  case 
of  a  visitation  of  that  one  dread  scourge,  a  "run,"  the  de- 
mand 'borrowers"  can  be  squeezed  instanter.  There  is  no 
waiting  for  their  paper  to  mature.  If  the  demand  for  pay- 
ment is  not  complied  with  at  once  by  a  payment  in  cash, 
or  by  a  check  on  some  other  account  that  can  be  charged 
with  the  amount,  the  securities  are  thrown  upon  the  market 
and  realized  upon  forthwith. 

The  proceeds  of  demand  "loans"  are  also  carried  on  the 
books  of  the  banks  as  deposits,  if  not  of  the  borrower  then 
of  the  payees  of  the  borrower,  in  the  same  manner  as  the 
proceeds  of  the  time  "loans"  are.  By  deducting  the  sum  of 
both  "loans"  from  the  remainder  above  given  we  shall  find 
that  the  deposits  in  fact  remaining  are  only  $2,049,233.62. 
This  then  is  the  actual  amount  of  the  deposits.  Add  to  that 
the  $200,000.00  of  the  bank's  capital  not  represented  by  the 
banking  house  and  the  $568,360.24  surplus  profits  not  yet 
divided  and  we  shall  have  $2,817,593.86.  Of  this  sum  there 
is  invested  in  U.  S.  and  other  bonds  the  $1,363,657.75,  leav- 
ing a  balance  of  $1,453,956.11.  How  much  of  this  there  is 
in  the  bank  we  cannot  tell  because  according  to  the  state- 
ment part  of  it  is  in  other  banks.  How  much  of  it  is  serving 
the  purpose  of  other  banks  in  the  same  way  does  not  appear. 
How  much  of  it  the  depository  bank  has  placed  out  on  call 
loans  we  cannot  tell. 


THE  EXPLOITATION  OF  THE  EXPLOITER  219 

Here  is  a  statement  of  another  bank.  This  one  separates 
the  figures  of  the  cash  it  has  on  hand  from  those  of  the 
cash  deposited  in  other  banks. 

RESOURCES. 

Banking  house  and  lot  $  200,000.00 

Bonds    2,252,831.00 

Accrued  interest 34J55-38 

Loans    8,561,987.84 

Overdrafts  472.52 

Cash  in  other  banks   1,264,457.24 

Cash  on  hand   707,715.79 

$13,021,619.77 

LIABILITIES. 

Capital    $  1,000,000.00 

Surplus    1,000,000.00 

Profits    500,91 1.36 

Reserved  for  taxes  12,605.21 

Resources  for  interest  36,578.12 

Deposits   10,471,525.08 


$13,021,619.77 

Here  the  nominal  deposits  amount  to  $10,471,525.08. 
This  includes  the  proceeds  resulting  from  the  discounting 
of  commercial  paper.  These  proceeds  are  entered  as  repre- 
senting deposits  on  the  credit  side  of  the  accounts  of  the 
borrowing  customers.  They  amount  in  the  aggregate  to 
$8,561,987.81.  Deducting  these  sham  deposits  of  money, 
we  shall  have  as  the  actual  deposits  $1,909,537.24.  Add  to 
this  the  capital,  surplus  and  unpaid  profits  of  $2,500,911.36, 
and  we  shall  have  $4,410,448.60.  When  we  deduct  from 
this  latter  the  sums  invested  in  the  banking  house  and  in 
bonds  and  on  deposit  in  other  banks  amounting  to  $3,717,- 
288.24,  there  will  remain  $693,160.36.     This  is  $14,55:..  \:) 


220  WHY  THE  CAPITALIST  ? 

less  than  the  amount  of  cash  in  the  statement  because  the 
statement  sets  out  on  the  left  as  reserved  for  taxes  and 
reserved  for  liabilities,  together,  $49,183.33.  If  then  we 
deduct  the  amount  of  accrued  interest  on  bonds,  etc.,  ap- 
pearing on  the  right,  namely,  $34,155.38,  and  also  the  over- 
draft of  $472.5*3,  also  appearing  on  the  left,  we  shall  have 
the  $14,555.43  difference  accounted  for.  The  net  result  is 
that  this  bank  has  $693,160.36  of  other  people's  money  on 
hand  over  and  above  all  other  liabilities  to  meet  possible 
demands  for  legal  tender  that  could  amount  to  $10,471,- 
525.08.  In  other  words  it  holds  in  cash  less  than  one  fif- 
teenth of  its  demand  liabilities  and  does  not  really  own  that. 
I  have  omitted  from  the  calculation  the  further  gain  that 
accrues  to  the  banker  from  the  rule  that  forbids  the  "bor- 
rower" to  draw  his  account  below  a  certain  percentage. 

On  the  strength  of  this  arrangement  a  bank  gets  interest 
at  discount  rates  on  $8,561,987.84.  If  all  this  be  at  six  per 
cent  it  means  that  this  toll  taken  by  the  bank  per  year  on  a 
showing  of  $693,160.36  amount  to  $513,719.22.  Interest 
computed  on  the  amount  actually  held  in  the  bank  to  meet 
demands  on  these  discount  credits  at  six  per  cent  would  be 
$41,589.62.  If  for  our  purpose  we  concede  the  taking  of 
this  latter  amount  of  interest  to  be  right,  then  we  have  the 
sum  of  $472,129.60  taken  for  the  bookkeeping  services  per- 
formed by  clerks.  The  bank  does  not  pay  any  more  than 
$20,000.00  a  year  for  this  work.  If  we  further  allow  the 
bank  a  full  10  per  cent  on  its  building,  we  shall  have  a 
necessary  expenditure  under  present  conditions  of  say 
$40,000.00.  For  this  the  bank  gets  $472,129.60,  an  excess  of 
$432,129.60,  or  432  per  cent.  All  of  this  profit  rests  on  the 
blind  belief  instilled  into  the  public  that  the  banker  is  mak- 
ing business  possible  by  lending  money  to  the  merchant 
and  the  manufacturer.  Besides  all  this  the  investments  in 
bonds  and  the  money  deposited  with  other  banks,  amount- 
ing to  $3,517,288.24  are  also  drawing  interest  all  the  time. 


THE  EXPLOITATION  OF  THE  EXPLOITER  221 

We  will  analyze  just  one  more  bank's  statement.  Here  is 
one  taken  from  the  report  of  the  Superintendent  of  Banks 
of  the  State  of  New  York  for  1912.    It  sets  out  its 

Stated  deposits  at   $4,507,923.00 

Deducting  loans  and  discounts   3,181,803.00 

We  have  the  actual  deposits  of  $1,326,120.00 

Add  to  this  the  bank's  capital  200,000.00 

And  its  surplus    271,988.00 

And  we  shall  have   $1,798,108.00 

Here  are  the  investments: 

Real    estate    $     11,600.00 

Stocks    and    bonds    134,934.00 

Public    securities    301,697.00 

Other    securities    42,500.00 

Deposited  in  other  banks    1,047,127.00 

Other   assets    5,250.00 

$1,543,108.00 

Leaving  a  balance  of   $  255.000.00 

The  published  statement  shows  the  amount  of  cash  on 
hand  including  "cash  items"  as  being  $250,301.00  or  $1,- 
301.00  more  that  the  balance  called  for.  This  difference 
must  be  located  in  the  item  of  "other  assets  $5,250.00" 
which  cannot  be  analyzed. 

Here  then  we  have  a  bank  carrying  deposit  credits  to 
customers  to  the  amount  of  $4,507,923.00  for  the  full 
amount  of  which  legal  tender  money  can  be  demanded  at 
any  moment.  Yet  experience  has  demonstrated  that  it  is 
not  necessary  to  carry  any  more  than  $256,301.00  to  take 
care  of  that  obligation.  Less  than  one  seventeenth  of  the 
demandable  obligations  of  the  bank  is  kept  in  the  banker's 
till.     This    is  less   than  six    per  cent.    All  the    remaining 


222  WHY  THE  CAPITALIST? 

cash  currency  is  "earning"  a  snug  profit  outside  whilst 
within  easy  reach  if  at  any  time  needed  to  head  off  that 
dreaded  "run." 

In  other  words,  the  bank  is  getting  at  least  six  per  cent 
on  $4,507,923.00  for  keeping  $256,301.00  in  cash  on  hand. 
The  computation  gives  us  $270,475.38  "compensation,"  more 
than  104  per  cent  for  this  "service"  alone. 

The  foregoing  illustrations  are  of  New  York  State  banks. 

The  Comptroller  of  the  Currency  of  the  United  States, 
in  his  report  for  1912,  tells  us  of  15,901  state  banking  in- 
stitutions. 

The  stated  deposits  of  these  banks  aggregate.$6,747,050,755.8i 
The  "loans  and  discounts"  are  5,390,349,187:21 

Leaving   actual   deposits    $1,356,701,568.60 

Of  this  the  cash  on  hand  was  531,358,592.12 

Leaving  to  be  accounted  for  $  825,342,976.48 

This  $825,342,976.48  together  with  the  "capital"  not  in- 
vested in  real  estate  and  furniture,  and  the  surplus,  etc.,  is 
all  invested  in  interest  paying  securities.  We  see  here  that 
with  an  amount  of  cash  on  hand  amounting  to  $531,358,- 
592.18  these  state  banks  hold  up  against  demand  obligations 
assumed  by  them  amounting  in  the  aggregate  to  $5,921,- 
707,779.33.  These  figures  show  that  the  average  amount 
of  cash  that  the  state  commercial  banks  carry  to  meet  their 
cash  demand  obligations  is  something  less  than  nine  per 
cent.  From  what  we  have  seen  this  is  a  perfectly  safe  mar- 
gin under  ordinary  conditions.  In  fact,  under  ordinary 
conditions  six  per  cent  would  be  safe.  Thus  it  appears  that 
the  average  rate  of  interest  on  business  "loans"  drawn  by 
the  state  banks  of  the  country  is  between  11  and  12  times 
greater  than  is  generally  supposed. 


THE  EXPLOITATION  OF  THE  EXPLOITER 

As  to  the  business  of  the  national  banks,  the  United 
States  Comptroller  gives  us  these  figures  in  his  report  for 
1912: 

Deposits : 

Individual   $5,891,670,007.00 

U.   S.  Postal   47,259.05342 

U.   S.   Disbursing    1 1,968,274.98 

$5,950,897,335-40 

Loans  and  discounts $6,040,841,270.81 

Overdrafts    20,168,074.45 

$6,061,009,345.26 
Deduct  the  outstanding  na- 
tional    bank     notes,     as 
these  are  loans,  amount- 
ing to    $   713,823,118.00 

Balance  of  "loans"  and  discounts   $5,347,186,227.26 

Excess   of  deposits   over  "loans" $   603,711,108.14 

The  report  tells  us  that  the  amount  of  cash  held  on  hand 
by  the  national  banks  on  the  same  day,  September  4th, 
1912,  was  $895,951,094.00.  This  means  that  these  banks 
were  on  the  day  stated  holding  cash  to  the  extent  of  about 
15  per  cent  of  their  demand  liabilities.  The  national  laws 
on  banking  are  responsible  for  the  fact  that  the  national 
banks  are  carrying  so  much  more  cash  to  support  their  lia- 
bilities than  the  state  banks  generally  find  it  necessary  to 
carry. 

The  development  of  the  banking  business  has  brought  it 
about  that  the  resulting  disadvantage  to  the  national  banks 
is  not  offset  any  more  by  the  right  of  the  national  banks 
to  issue  bank  notes  guaranteed  by  the  government.  The 
profits  made  by  the  issuing  of  these  notes  are  very  small 
compared  to  the  profits  derivable  from  interest  on  "loans" 
that  to  the  extent  of  95  per  cent  are  not  loans  at  all,  but 
are  simply  book  entries.     Hence  the  recent  legislation  at 


224:  WHY  THE  CAPITALIST  ? 

Washington  changing  the  national  banking  law.  It  is 
usually  spoken  of  as  the  "currency  legislation"  or  the 
"money  legislation"  in  the  newspapers.  The  fault  with 
those  designations  is  that  they  put  the  accent  in  the  wrong 
place.  The  principal  and  by  far  the  most  important  object 
attained  by  that  legislation  will  be  the  reorganization  of 
the  national  banking  system  in  such  a  way  that  the  national 
banks  will  not  be  required  under  the  law  to  carry  so  large 
an  amount  of  cash  as  heretofore  to  hold  up  their  book 
credits  called  'loans"  against  the  possibility  of  that  dreaded 
"run."  It  would  not  have  been  wise  to  have  insisted  upon 
an  abrogation  of  the  existing  legal  requirement  as  to  re- 
serves. That  would  have  provoked  a  general  public  dis- 
cussion of  the  whole  science  of  banking;  and  that  would 
have  thrown  the  fat  into  the  fire.  The  principal  objects 
that  will  be  attained  by  the  law  recently  enacted  are  two. 
One  is  the  centralization  of  the  national  banks  in  such  a 
way  that  each  bank  may  maintain  its  individuality  and 
prestige  as  a  national  bank,  and  at  the  same  time  have  cer- 
tain centers  or  stations,  to  be  called  regional  banks,  where 
by  the  contribution  of  a  relatively  small  amount  of  cash  by 
each  bank  a  sufficient  supply  of  money  in  the  aggregate 
may  be  maintained  to  relieve  any  individual  bank  by  des- 
patching money  to  it  on  a  rediscount  of  its  paper  whenever 
it  is  threatened  with  a  run.  This  is  called  mobilizing  assets. 
It  will  also  enable  the  banks  to  extend  the  check  exchanging 
or  swapping  system  by  the  establishment  of  regional  and 
national  clearing  houses.  The  features  of  this  legislation 
that  were  talked  of  the  most  were  entirely  secondary  and 
subsidiary.  These  secondary  and  subsidiary  features  were 
discussed  most  learnedly  and  in  strange  terms.  They  fur- 
nished the  means  to  keep  the  public  mind  in  a  whirl  on  the 
whole  subject  of  banking.  Practically  nobody  outside  of  a 
few  leaders  understood  the  subject. 
The  national  banker  could  not  operate  his  mill  to  its  full 


THE  EXPLOITATION  OF  THE  EXPLOITER  225 

capacity,  even  when  he  could  get  the  customers.  It  would 
have  been  too  dangerous  in  case  confidence  had  been  shaken 
and  all  persons  holding  credits  on  the  bank's  books  had  de- 
manded that  they  be  paid  their  demands  in  money.  In 
other  words,  when  large  numbers  called  upon  the  banker 
to  perform  his  contract  to  furnish  money  on  demand  to  the 
full  extent  of  their  claims,  things  became  shaky  for  the 
banker.  He  thrives  like  the  bay  tree  when  he  is  not  called 
upon  to  perform  his  contract.  When  however  he  is  much 
called  upon  to  perform  his  contract,  things  are  bad,  every- 
thing is  threatened  with  destruction.     Panic  ensues. 

The  increase  in  the  volume  of  this  business  of  granting 
"loans  and  discounts"  by  crediting  them  on  the  banks' 
books  to  be  written  back  and  forth  has  been  tremendous. 
It  has  exceeded  in  an  astonishing  degree  the  rate  at  which 
the  stated  wealth  of  the  nation,  or  the  business  of  the  nation 
has  increased.  We  are  able  to  draw  some  interesting  in- 
formation from  the  official  figures  on  this  subject.  The 
Department  of  Commerce  and  Labor  tells  us  that  in  1870 
the  entire  wealth  of  the  United  States  was  $30,068,518,000, 
and  that  in  1904,  the  latest  figures  available  at  this  writing, 
it  was  $107,104,211,917.  That  is,  it  was  multiplied  by  a 
little  more  than  three  and  one-half.  During  the  same  period 
the  bank  "loan"  and  discount  business  increased  from 
$719,300,000  in  1870,  to  $7,982,000,000  in  1904.  It  was 
multiplied  by  11. 

The  figures  available  tell  us  that  all  the  farm  property  in 
the  United  States,  real  and  personal,  in  1890  was  worth 
$16,082,00^000  and  that  in  1910  it  was  worth  $40,991,- 
000,000.  It  was  multiplied  by  about  two  and  a  half.  During 
that  same  period,  the  "loan"  and  discount  business  of  the 
banks  increased  from  $3,842,200,000  in  1890  to  $12,521,- 
800,000  in  1910.    It  was  multiplied  by  three  and  a  quarter. 

The  available  figures  show  us  that  the  manufactures  in 
the  United  States  increased  from  $11,406,927,000  in  1899 


226  WHY  THE  CAPITALIST? 

to  $20,672,052.00  in  1909,  an  increase  of  8.1  per  cent.  Dur- 
ing the  same  period  the  "loan"  and  discount  business  of 
the  banks  increased  from  $5,177,600,000.00  to  $11,373,200,- 
000.00,  an  increase  of  119.6  per  cent. 

The  figures  of  the  Interstate  Commerce  Commission  tell 
us  that  the  total  operating  revenues  and  income  of  all  the 
railroads  in  the  United  States  for  the  year  1894  amounted 
to  $1,098,807,291.00  and  in  1910  $2,829,109,462.00,  an  in- 
crease of  157.48  per  cent.  During  the  same  period  the 
"loan"  and  discount  business  of  the  banks  increased  from 
$4,085,000,000.00  to  $12,521,800,000.00,  or  an  increase  of 
306.53  per  cent. 

The  figures  furnished  by  the  Geological  Survey,  De- 
partment of  the  Interior,  tell  us  that  the  production  of  an- 
thracite coal  in  1871  was  20,807,851  tons,  and  75,433,246 
tons  in  1911  an  increase  of  54,625,395  tons,  or  262.5  per 
cent ;  and  the  production  of  bituminous  coal  increased 
from  26,848,751  tons  to  372,420,663  tons,  an  increase 
of  345,571,912  or  1286  per  cent;  that  the  production 
of  pig  iron  increased  from  2,188,526  tons  in  1871  to  27,303,- 
567  tons  in  1911,  an  increase  of  25,115,041  or  1147.5  per 
cent.  Yet  during  this  same  period  of  time  the  "loan"  and 
discount  business  of  the  banker  increased  from  $789,400,000 
to  $13,046,400,000,  or  by  $12,257,000,000.  This  is  an  in- 
crease of  1552.69  per  cent. 


CHAPTER  XX. 

THE    MORGAN'S    CRIMP    REFORMS— CHARITY 
AND  EFFICIENCY. 

The  morgan  does  not  like  to  have  any  fuss  made  about 
his  game  of  "heads  I  win  and  tails  you  lose."  It  makes 
him  nervous.  That  game  is  the  law  of  his  life  and  the 
order  of  his  being.  Therefore  he  is  strong  for  law  and 
order.  It  is  his  state,  his  law  and  his  order  that  he  is  for 
and  that  must  be  maintained  at  all  hazards.  To  him 
every  effort  to  search  into  the  inherent  nature  of  his 
monstrous  structure  betrays  the  lawless  mind.  To  dis- 
cuss the  wickedness  of  morganism  is  to  foment  strife  and 
disorder!  Prosecuting  and  persecuting  these  lawless 
minds  and  wicked  fomenters,  though  most  laudable,  is  not 
enough.  Their  influence  must  be  counteracted.  And 
their  influence  is  most  widespread. 

Every  gentile  outburst  for  self  preservation,  every  turn 
of  the  worm,  every  noble  impulse  of  the  ignoble  star- 
veling for  some  collective  improvement,  be  it  ever 
so  pure,  native  and  unsophisticated — to  say  nothing  of 
that  horror  of  all  horrors,  when  the  toothless  worm  tries 
to  bite  the  iron  heel — is  at  once  ascribed  to  the  hellish 
machinations  of  the  lawless  mind  of  the  agitator  and 
fomenter  of  strife.  Of  course,  it  is  not  expected  or  be- 
lieved by  the  morgan  or  his  panders  that  a  vestige  of  the 
natural  spirit  of  self  preservation  remains  or  could  re- 
main in  the  gentile  after  his  long  and  careful  training 
through  the  pulpit,  the  bench,  the  bar  and  the  press.  The 
constantly  recurring  expressions  of  resentment  and  pro- 
test, no  matter  how  vague,  unlearned,  undefined  or,  albeit 
unsophisticated,  or  from  unexpected  quarters  or  upon  the 

227 


228  WHY  THE  CAPITALIST? 

most  inopportune  occasions,  furnish  many  painful  sur- 
prises to  the  morgan,  after  all  that  he  has  done.  He  can 
not  believe  that  there  is  so  much  ingratitude  in  the  gentile 
heart.  He  actually  believes  that  he  gave  and  is  giving  the 
gentiles  their  only  chance  to  live,  that  without  him  the 
gentiles  could  neither  breathe  air  nor  enjoy  sunshine. 

To  the  morgan's  mind  the  spirit  of  rebellion  is  not 
and  should  not  be  natural  to  the  gentile's  mind  or  heart. 
The  morgan  thinks  it  all  attributable  to  the  aforementioned 
lawless  mind  arid  fomenter  of  strife.  To  the  morgan's 
mind,  the  lawless  agitator  and  disturber  plays  upon  the 
sufferings  of  the  unfortunate,  stirs  up  the  passions  of 
sympathy  of  the  competent  gentiles  for  the  incompetent, 
creates  an  artificial  fellow  feeling  in  the  hearts  of  the  vir- 
tuous and  strong  for  the  world's  weak  refuse.  The  in- 
herent feeling  of  resentment  against  constant  oppression 
and  exploitation  that  bursts  forth  here  and  there  and 
everywhere,  and  that,  like  Banquo's  ghost,  will  not  down, 
does  not,  cannot  exist  for  the  morgan's  mind.  To  him, 
all  of  this  is  the  work,  the  consciously  planned  work,  the 
subtle  work  of  the  agitator.  What  a  wonderful,  what  a 
marvelous  mind  and  spirit  this  agitator  must  have!  The 
old  Satan  no  longer  prowls  about  the  earth  seeking  souls 
to  drag  to  hell.  The  modern  factory  system  has  chained 
him  more  effectually  than  he  was  ever  chained  before. 

To  the  mind  of  the  morgan,  that  growing  spirit  of 
unrest,  that  saving  inherent  excellence  of  human  nature, 
is  a  new  Satan.  This  inherent  excellence,  the  morsran 
and  his  panders  also  personify,  as  they  personified  their 
deity  and  their  devils.  They  paint  it  black  as  pitch  and 
call  it  the  agitator  with  the  lawless  mind  and  disorderly 
career.  The  morgan,  who  used  to  be  most  concerned 
about  saving  the  souls  of  the  gentiles  from  the  wiles  of 
that  Satan  who  smells  of  sulphur  and  brimstone  and  fire, 
has   now  a  growing  concern   in  the   new   danger,  that 


THE  MORGAN'S  CRIMP  REFORMS  229 

modern  Satan  who  consumes  midnight  oil  and  smells 
of  books.  So  the  morgan  dons  the  mufti  of  reform.  His 
immense  pile  of  ill-gotten  wealth  is  pointed  to  by  his 
dupes  and  panders,  as  proof  positive,  both  of  his  good 
faith  and  his  high  comprehension.  With  great  parade  of 
learning,  two  bracers  are  presented  by  him.  The  one  is 
charity  and  the  other  efficiency.  The  one  is  a  little  salve 
rubbed  upon  the  open  sore  which  it  cannot  heal,  and  the 
other  is  a  hope-inspiring  promise  that  things  will  be  better 
by  and  by.  The  salve  of  charity  makes  the  recipient  more 
abject  and  broken  in  spirit  than  before.  It  makes  him 
confess  and  even  realize  an  inferiority  that  does  not  exist. 
It  makes  him  accept  with  resignation  and  even  thankful- 
ness the  monstrous  conditions  that  are  purely  the  result 
of  false  and  artificial  teachings.  Like  bad  advice,  it 
makes  the  innocent  and  worthy  confess  the  commission 
of  crimes  that  they  never  committed.  It  smears  virtue 
and  nobleness  of  character  with  the  pitch  of  indolence, 
incontinence  and  criminal  propensity,  and  invests  greed 
and  ravenous  cupidity  with  the  ascension  robe  of  an  arch- 
angel. I  cannot  hope  to  set  forth  all  of  the  ways  in  which 
charity  further  enslaves  the  gentile,  mind  and  body.  I 
shall  have  to  leave  it  to  some  Carlyle  to  draw  the  indict- 
ment of  this  much  lauded  bawd  called  charity. 

Charity  affords  to  the  morgan  a  most  valuable  additional 
support  in  his  overlordship.  His  so-called  charitable 
donations  are  only  cheap  premiums  paid  by  him  for  in- 
surance. In  that  circle  where  gamblers'  ethics  hold  sway, 
the  gambler  is  considered  a  very  decent  fellow  who  tosses 
back  to  his  victim  enough  to  buy  a  drink  and  pay  his  car 
fare  home,  after  stripping  him  of  his  week's  wages.  So 
the  morgan  gets  the  reputation  for  philanthropy  by  giving 
back  in  about  the  same  way  what  amounts  to  a  sneering 
triile  from  the  pile  of  plunder  that  he  has  heaped  up  by 
his   depredations.     His  philanthropic  parade  is  to  him   a 


230  WHY  THE  CAPITALIST  ? 

necessary  and  legitimate  expense  of  the  business.  It  is 
cheaper  than  maintaining  armies.  All  told,  it  amounts  to 
a  shrewd  and  safe  investment.  Not  only  the  organizations 
through  which  the  morgan's  charity  is  placed,  but  also 
the  principle  of  his  charity  itself,  is  based  upon  and  can- 
not be  maintained  without  the  poverty  that  results  from 
the  expropriation  and  exploitation  of  the  gentile  by  the 
morgan.  The  morgan  makes  paupers  so  as  to  parade 
as  philanthropist.  His  iso-called  philanthropy  then  en- 
trenches him  so  that  he  can  go  on  exploiting  mankind  the 
more,   and  produce   more   pauperism. 

As  to  the  efficiency  schemes,  these  are,  if  possible,  even 
worse  than  the  charities.  There  can  be  no  valid  objection 
to  a  higher  degree  of  efficiency  in  itself.  On  the  contrary, 
it  is  in  and  of  itself  quite  desirable,  and  would  be  welcome 
if  the  worker  obtained  the  additional  value  that  he  pro- 
duces because  of  his  higher  efficiency.  But  such  is  not 
and  cannot  be  the  case  under  the  morgan's  regime.  The 
measure  of  the  worker's  allowance  is  the  amount  neces- 
sary for  him  to  live  upon  in  his  station  of  life  and  to 
reproduce  his  kind.  It  always  seeks,  as  it  were,  that  level. 
As  the  worker's  ability  advances  to  manage  with  less,  he 
gets  less,  and  the  morgan  gets  constantly  the  more.  This 
applies  to  all  gentiles.  Every  saving  and  every  economy 
learned  and  applied  by  the  gentile,  inures  sooner  or  later 
to  the  greater  substantial  aggrandizement  of  the  morgan, 
by  simply  causing  to  grow  larger  the  amount  of  surplus 
that  flows  to  the  morgan's  coffers.  In  fact,  as  we  have 
seen,  the  worker  is  compelled  from  time  to  time  to  wage 
destructive  and  costly  warfare  against  being  forced  below 
the  line  before  he  has  learned  to  manage  on  the  still  more 
greatly  reduced  allowance  that  the  morgan  is  relentlessly 
trying  to  force  him  down  to.  In  other  words,  the  gentile 
is  never  learning  to  save  and  economize  fast  enough  to 


THE  MORGAN'S  CRIMP  REFORMS  231 

suit  the  morgan.  Hence  the  frequent  recurrence  of  in- 
dustrial warfare. 

There  is  nothing  more  astonishing  than  the  persistency 
with  which  the  morgan  pretends  to  hang  on  to  the  ancient 
and  exploded  notion  and  theory  that  without  changing 
our  economic  system,  an  increase  of  the  worker's  output 
will  in  itself  improve  the  economic  condition  of  the  gentile 
masses.  One  would  almost  think  that  the  morgan  is  wil- 
ful in  his  dogged  blindness  and  deafness  as  to  this  theory 
of  his.  But  the  morgan  in  his  true  nature  is  a  beast 
of  prey.  He  is  a  gamester.  There  is  no  one  so  stupid  as 
a  cheat  when  taken  outside  of  his  game  or  when  facing 
opposition  to  his  game.  The  cheat  must  always  have 
the  easily  subjected  and  unsophisticated  mind  to  deal  with, 
the  mind  that  is  always  prone  to  fall  in  on  the  other  fellow's 
game. 

The  questioning,  doubting  and  suspicious  mind  is 
not  prone  to  fall  in  on  the  other  fellow's  game,  and  always 
portends  disaster  to  the  cheat.  The  cheat  is  always  non- 
plussed when  his  game  is  exposed.  He  always  fights  in 
avoidance  of  the  attack,  he  never  meets  it.  He  will  flash 
his  showy  jewelry  and  his  dim  witticisms  and  make  great 
parade  of  his  respectability,  or  if  needs  be,  fume  with  in- 
dignation at  the  "slanderous  insinuation  and  aspersion 
cast  upon  an  honest  man."  Having  driven  off  the  enemy 
either  with  horse  laughter  or  with  brickbats,  the  morgan 
proceeds  to  do  business  with  those  who  wish  to  do  busi- 
ness. He  shows  them  how  they  can  gain  great  things  by 
playing  his  game,  by  accepting  his  imposed  conditions. 

These  conditions  he  admits  seem  most  exacting,  but 
progress  is  the  order  of  the  day,  he  says,  and  the  survival 
of  the  fittest — under  these  conditions  imposed  by  him — is 
the  law  of  nature.  Order  and  law  is  his  forte.  Those 
that  are  "too  weak"  to  meet  these  conditions  are  the  unfit 
that  must  succumb,  they  are  the  unfortunate,  the  poor  that 


232  WHY  THE  CAPITALIST  ? 

are  always  with  us!  These  poor  subsist  a  little  while  on 
charity,  or  in  prison,  and  then  pass  out  unwept,  unhonored 
and  unsung.  That's  the  way  nature  has  of  sloughing  off 
the  undesired.  The  morgan  and  his  panders  prate  most 
sagely  of  human  nature,  and  of  nature's  laws  as  the  mor- 
gan has  them  interpreted,  and  of  human  law  and  order  as 
his   wealth  and  power  has   dictated  them. 

The  morgan  and  those  in  the  service  of  his  holy  cause 
point  to  the  glittering  cheap  prizes  drawn  in  the  prize- 
packages  dearly  bought  from  him  with  back-breaking 
labor.  Of  those  who  went  away  empty  handed  or  with 
the  ordinary  prize-package  brass  button,  and  of  the  crushed 
and  broken  ones,  thrown  out  upon  the  scrap  heap  of  hu- 
manity, a  discreet  silence  is  maintained. 

To  supply  the  ever  growing  demand  of  the  morgan  in 
the  business  of  raising  false  hopes  that  things  will  be 
better  by  and  by,  there  has  grown  up  within  recent  times 
a  useful  new  profession  of  efficiency  engineering.  Organ- 
ization and  management  for  efficiency  has  been  made  a 
special  science.  It  is  already  adding  immensely  to  the  out- 
put of  human  effort  in  the  industries,  and  its  possibilities 
are  beyond  conjecture.  Votaries  of  this  new  science  lay 
themselves  open  however  to  adverse  criticism  by  pre- 
tending that  their  science  furnishes  a  solution  of  the  social 
question.  They  fall  into  the  error  that  previous  inventors 
and  students  fell  into,  of  supposing  that  increased  pro- 
ductive capacity  spells  an  increased  distribution  of  result- 
ing benefits.  History  proves  that  no  greater  fallacy  was 
ever  evolved.  When  these  scientists  stick  to  their  special 
line,  and  things  pertaining  to  it,  they  do  well  enough.  But 
whenever  they  enter  the  domain  of  the  political  econom- 
ist and  sociologist  they  become  hopelessly  lost.  They  are 
likely  to  think  that  because  they  have  a  masterly  grasp 
of  one  science,  they  necessarily,  without  further  equipment, 
must  be  capable  to  settle  off-hand  all  other  questions  in 


THE  MORGAN'S   CRIMP   REFORMS  233 

all  other  departments  of  learning.  So  they  rush  in  every- 
where and  thrash  aimlessly  about.  They,  like  other  work- 
ers, sell  their  labor  power  to  the  morgan.  If  they  would 
only  let  it  go  at  that ;  if  they  would  only  not  feel  called 
upon  to  break  a  lance  in  defense  of  the  morgan's  monstrous 
institution  of  private  property,  they  would  not  render  them- 
selves proper  subjects  of  the  contempt  and  ridicule  of 
students. 

Mr.  Frederick  Winslow  Taylor  has  had  great  success 
as  an  efficiency  expert.  He  has  perhaps  been  the  one  most 
conspicuously  before  the  general  public  as  a  teacher  and 
lecturer.  Of  late  he  has  been  somewhat  of  a  lecturer  be- 
fore morgan-minded  clubs  and  congregations  on  his  meth- 
ods of  solving  the  social  problem  by  means  of  higher 
productive  efficiency.  He  has  also  written  a  book  called 
"The  Principles  of  Scientific  Management."  The  opening 
sentence  of  the  first  chapter  is:  "The  principal  object  of 
management  should  be  to  secure  the  maximum  prosperity 
for  the  employer,  coupled  with  the  maximum  prosperity 
for  each  employe."  Mr.  Taylor  proposes  to  attain  this  end 
by  training  and  developing  each  individual  worker  so  that 
he  can  (at  his  fastest  pace  and  with  the  maximum  of  effi- 
ciency) do  the  highest  class  of  work  for  which  his  abilities 
fit  him,  and  "to  induce  him  to  use  his  best  efforts,  his 
hardest  work,  all  his  traditional  knowledge,  his  skill,  his 
ingenuity,  and  his  good  will  to  yield  the  largest  possible 
return  to  his  employer."  Mr.  Taylor  gives  many  instances 
in  which  this  object  was  most  successfully  attained  under 
his  direction  and  management.  I  mean  attained  for  the 
morgan.  He  tells  how  75  men  under  him  were  receiving 
$1.15  a  day  each  for  handling  12%  long  tons  of  pig  iron. 
Then  he  instituted  his  reform.  He  started  by  picking  out 
a  most  ox-like  Pennsylvania  Dutchman.  This  piece  of 
stunted  mentality  was  flattered  with  special  attention,  called 
a  high-priced  man  that  should  not  be  working  for  a  meagre 


234  WHY  THE  CAPITALIST  ? 

$1.15  per  day,  and  so  gotten  to  do  task-work  under  a  man 
with  a  stop  watch.  He  picked  up  a  pig  of  iron  when  told 
to,  walked  when  told  to,  dropped  the  iron  when  told  to, 
returned  to  the  pile  when  told  to,  "rested"  when  told  to; 
and  so  worked  the  day  through,  loading  47  long  tons  of 
pig  iron  from  the  ground  into  railroad  cars.  At  $1.15 
for  12  V-2  tons,  the  loading  of  47  tons  would  cost  $4.32  a 
load.  Under  Mr.  Taylor's  method  of  higher  efficiency  it 
cost  only  $1.85,  an  additional  profit  of  $2.47  for  the  morgan, 
as  compared  to  the  70  cents  more  that  the  pig-iron  handler 
got.  One  thing  naturally  follows  from  the  introduction 
of  this  great  reform  of  Mr.  Taylor's,  and  that  is  that  a 
given  amount  of  pig  iron  could  be  handled  by  one-fourth 
the  number  of  men  formerly  required.  This  rendered  so 
much  keener  the  competition  among  pig-iron  men  for  a 
living,  and  the  men  less  fit  to  fill  the  new  requirements 
would  naturally  be  "weeded  out."  The  scientific  reformer 
says  on  page  61  of  his  book  that  only  one  out  of  every 
eight  of  his  75  original  pig-iron  handlers  were  capable  of 
handling  47%  tons  of  pig  iron  per  day.  The  man  that 
could  work  the  whole  day  under  a  driver  with  watch  in 
hand,  this  reformer  himself  says  in  this  book  h&d  to  be, 
and  invariably  was,  as  stupid  as  an  ox.  Mr.  Taylor  might 
have  added  that  such  men  were  kept  as  stupid  as  oxen 
by  their  work. 

The  next  great  instance  of  solving  the  social  question 
that  Mr.  Taylor  gives,  relates  to  shoveling,  and  is  the 
laborious  result  of  thousands  of  stop-watch  observations. 
Under  the  system  evolved  by  Mr.  Taylor,  the  number  of 
laborers  employed  by  one  institution  was  reduced  from 
about  600  to  about  140.  The  average  number  of  tons  of 
material  handled  by  each  man  per  day  was  raised  from 
16  to  59.  The  average  daily  pay  of  each  man  that  survived 
on  the  job  was  raised  from  $1.15  to  $1.88.  The  average 
cost  of  handling  a  ton  of  2240  pounds  was  reduced  from 


THE   MORGAN'S   CRIMP   REFORMS  235 

72  cents  to  33  cents.  In  other  words,  a  man  formerly  got 
$1.15  for  moving  16  tons.  Now  he  gets  $1.88  for  moving 
59  tons.  Under  the  old  system  the  handling  of  59  tons 
cost  $4.28.  Had  the  wages  remained  the  same,  the  new 
additional  profit  would  have  been  $3.13.  But  the  laborer 
had  to  be  given  something  more  to  keep  him  going  at  the 
higher  pace  and  place  in  society  to  which  he  was  lifted 
for  the  time  being.  Seventy-three  cents  is  the  measure 
of  his  lift.  That  is  less  than  one-fourth  of  the  additional 
value  that  his  labor  now  produces.  The  morgan  gets  a 
raise  of  $2.40  per  day  on  each  laborer,  or  more  than  three- 
fourths  of  the  new  gain.  The  increase  of  the  surplus 
profit  flowing  to  the  morgan  by  reason  of  this  one  reform 
for  the  year  amounted  at  one  plant  to  $36,417.69.  But  Air. 
Taylor  seemingly  does  not  consider  the  sufferings  and  pri- 
vations of  the  460  men  that  were  weeded  out  by  the 
process,  or  of  their  wives  and  children. 

Mr.  Taylor  devotes  many  pages  of  his  book  to  the  in- 
genious manner  in  which  the  efficiency  of  children  inspect- 
ing steel  bearing-balls  was  so  increased  that  thirty-five 
girls  did  the  work  formerly  done  by  120,  and  raised  the 
accuracy  of  the  work  66  per  cent.  The  value  produced 
by  these  girls  was  thus  increased  343  per  cent.  Of  this 
they  got  about  one-fourth.  Their  pay  was  raised  from  80 
to  100  per  cent.  The  rest  of  the  increase  went  to  the  mor- 
gan's coffers. 

Again,  Mr.  Taylof  tells  how  he  went  into  a  factory  and 
by  the  use  of  stop-watch,  slide  rules,  close  scientific  ob- 
servations, careful  computation,  co-ordination,  changing 
of  tools  and  the  material  of  which  tools  are  made,  suc- 
ceeded in  speeding  up  the  machines.  The  minimum  accel- 
eration was  two  and  a  half  times  the  former  speed.  The 
maximum  acceleration  was  as  much  as  nine  times.  He 
says  that  within  three  years  the  output  in  this  factory  hail 
in  this  way  been  more  than  doubled  per  machine  and  per 


236  WHY  THE  CAPITALIST  ? 

man,  and  that  on  an  average  the  wages  of  the  men  was 
increased  about  35  per  cent,  whilst  the  sum  total  of  the 
wages  for  a  given  amount  of  work  was  lower.  Now  the 
effect  of  this  was  to  increase  greatly  the  amount  of  value 
produced  within  the  same  length  of  time  by  each  man. 
Mr.  Taylor  does  not  say  how  much  this  increase  was,  but 
says  it  was  more  than  100  per  cent.  That  is  quite  evident 
when  we  are  told  that  the  speeding  up  was  from  two  and 
a  half  to  nine  times  the  former  speed.  Mr.  Taylor  should 
have  been  more  definite  in  this,  since  he  is  posing  as  a 
political  economist  and  sociologist  as  well  as  a  scientific 
organizer.  He  tries,  however,  to  be  precise  in  telling  us 
that  the  average  increase  in  the  earnings  of  the  workmen 
was  about  35  per  cent.  Now  that  is  about  one-third  of 
the  increase  in  value  that  the  worker  gives  to  the  morgan 
at  the  very  minimum  of  that  increase,  as  we  are  informed 
by  Mr.  Taylor.  In  other  words,  for  every  thirty-five  cents 
increase  that  the  worker  gets  in  his  pay  envelope,  he  gives 
the  morgan  an  increase  of  more  than  a  dollar.  How  much 
more,  we  are  not  told  and  therefore  are  left  to  infer  for 
ourselves.  Of  course  it  is  true  that  the  efficiency  engi- 
neer contributes  to  the  resulting  increase  in  output.  We 
are  not  told  how  much  the  efficiency  engineer  gets  of  the 
value  that  he  so  produces,  but  it  is  safe  to  say  that  it  is 
a  very  small  proportion. 

Mr.  Taylor's  excellent  work  is  that  of  substituting  scien- 
tific method  and  management  in  the  place  of  rule-o'-thumb 
lack  of  method,  and  mismanagement.  His  work  belongs 
in  the  same  classification  as  that  of  an  inventor  or  im- 
prover of  a  machine.  Mr.  Taylor  could  have  stayed  where 
he  belongs  and  been  content  to  enjoy  his  laurels.  But  no, 
he  must  go  forth  and  seek  new  worlds  to  conquer.  He 
enters  the  world  of  political  economy.  For  that  world 
he  is  as  unsuited  as  would  be  his  stolid,  ox-like  pig-iron 


THE  MORGAN'S   CRIMP   REFORMS  237 

handler.  Worse  than  that  even,  Mr.  Taylor  has  been  ren- 
dered even  more  unfit  by  his  previous  activities  and  ex- 
periences. He  seems  not  to  know  that  he  is  trying  to 
cajole  students  with  the  same  sort  of  chaff  that  produced 
such  good  results  with  his  ox-like  Pennsylvania  Dutchman 
at  the  pile  of  pig  iron.  So  Mr.  Taylor  goes  right  up  to 
the  question  of  "a  fair  division  between  the  employer  and 
the  workman,"  and  he  cites  the  case  of  the  pig-iron  han- 
dler, and  admits  that  it  does  not  look  fair.  Here  he  is 
in  deep  water  before  he  knows  it.  All  in  a  sputter,  he 
delivers  himself  of  the  most  ordinary  impossibilities  of 
the  shallow-pated  and  superficial  newspaper  writer,  who 
for  a  pittance  a  week  tries  to  hold  the  moon  with  his  teeth. 
He  tells  us  that  this  appearance  of  unfairness  is  an  illu- 
sion merely;  that  it  is  not  unfair  at  all;  that  the  morgan 
does  not  get  it,  but  that  the  consuming  public  gets  the 
benefit.  He  gives  us  no  intimation  of  what  he  means  by 
"the  consuming  public"  as  distinguished  from  the  mass 
of  workers  and  their  employers.  He  does  not  seem  to 
know  that  a  great  part  of  the  consuming  public  consists 
of  wage  workers  in  some  form  or  another;  nor  ever  to 
have  been  informed  that  the  purchasing  power  of  the 
individual  worker  has  for  a  long  time  been  steadily  de- 
clining; or  that  pensioners  and  persons  living  on  fixed 
incomes  have  for  a  long  time  been  finding  it  constantly 
and  increasingly  more  difficult  to  live  on  their  allowances. 
He  does  not  seem  ever  to  have  understood  that  the  con- 
stantly increasing  cost  of  living  denies  the  claim  that  the 
consuming  public  gets  the  benefit  of  the  improvements  in 
production  that  result  from  science. 

Mr.  Taylor  seems  to  be  innocent  of  all  understanding 
of  the  position  in  society  of  the  gentile  class  in  its  three 
orders,  or  of  their  expropriation  and  its  results.  His 
"consuming  public"  is  the  morgan  class. 

Mr.  Taylor  as  a  scientist  is  only  one  of  a  type  of  minds 


238  WHY  THE  CAPITALIST  ? 

that  seem  to  think  that  because  they  must  take  their  work- 
ing ability  to  the  one  market  we  now  have,  namely,  the 
market  of  the  morgan,  therefore  they  owe  allegiance  to 
the  morgan  in  all  things ;  belong  body  and  soul  to  the  mor- 
gan, and  must  at  all  times  and  upon  all  occasions  defend 
and  support  the  morgan's  scheme  of  exploitation  and  must 
even  go  outside  of  their  work  and  beyond  their  depth 
and  understanding  to  win  favor.  But  the  morgan  himself 
does  not  know  any  better.  The  kind  of  learned  misfit  odds 
and  ends  so  served  up  serves  his  purpose.  So  'twill  do 
most  excellently. 

I  have  before  me  a  booklet  of  instruction  for  managers 
of  stores  and  of  departments  in  department  stores.  It  is 
used  extensively  as  a  guide  and  sets  forth  in  the  most 
native  and  unaffected  simplicity  the  morgan's  profit-taking 
point  of  view  and  economic  analysis.  It  is  in  fact  a  splen- 
did presentation  of  the  profit-taking  propensity.  It  makes 
a  special  plea  to  managers  to  bring  about  the  largest  return 
of  profits  possible.  It  points  out  that  the  salesmen  and 
saleswomen  must  sell,  at  prices  50  per  cent  above  cost, 
not  less  than  twenty  times  as  much  as  their  respective 
wages  amount  to  in  order  to  "earn"  their  wages.  This 
must  be  the  average  the  whole  year  round.  The  bases 
for  the  gradations  of  wages  are  set  forth  at  length.  The 
clerk  that  gets  $4.00  a  week  must  sell  at  least  $80.00 
worth  of  goods  a  week;  when  he  gets  $5.00  he  must  sell 
at  least  $100.00  worth;  when  he  gets  $6.00  he  must  sell 
at  least  $120.00  worth  a  week;  when  he  gets  $7.50  he 
must  sell  at  least  $150.00  worth  a  week;  when  he  gets 
$10.00  he  must  sell  at  least  $200.00  worth;  when  he  gets 
$12.50  he  must  sell  at  least  $250.00  worth;  and  when  he 
gets  $15.00  a  week,  he  or  she  must  sell  at  least  $300.00 
worth  of  goods  each  week. 

At  the  lowest  compensation  stated,  the  beginner  sells 
$80.00  worth  of  goods  a  week.    The  50  per  cent  advance 


THE  MORGAN'S   CRIMP  REFORMS  239 

on  cost  gives  $26.66  gross  profits.  The  wages  are  $4.00, 
the  other  expenses  of  doing  business  are  computed  to  be 
$9.33.  This  leaves  a  net  profit  of  $13.33.  Here  we  see 
that  the  clerk's  efforts  brought  in  a  gain,  over  and  above 
the  other  expenses  of  doing  business,  amounting  to  $17.33. 
Of  this  the  clerk  gets  something  less  than  one-fourth. 
One-fourth  would  amount  to  $4.33,  but  the  morgan  keeps 
the  33  cents,  to  encourage  the  clerk  to  do  better. 

The  next  week  this  clerk  sells  $100.00  worth  and  gets 
his  $1.00  raise  of  salary,  we  will  say.  The  gross  profits 
now  amount  to  $33.33.  Deducting  the  expenses  of  doing 
business,  except  as  to  this  clerk's  pay,  $9.33,  we  have 
$24.00  left  for  the  clerk  and  the  morgan.  This  is  $6.67 
more  than  the  measure  of  their  prosperity  for  the  week 
before  amounted  to.  Of  this  $24.00  the  clerk  gets  $5.00, 
which  is  one-fifth,  and  20  cents  besides,  generously  thrown 
in  by  the  morgan  as  an  expression  of  his  appreciation. 
The  clerk's  raise  of  $1.00  is  less  than  one-sixth  of  the  raise 
that  the  clerk's  increased  efficiency  gave  to  the  gracious 
morgan.  Hence  the  appreciation.  The  morgan  gets  the 
other  $5.67. 

Here  we  see  the  rate  of  progress  achieved  as  a  reward 
of  faithful  services.  The  young  woman  who  enters  upon 
such  employment  does  not  as  a  rule  expect  to  make  that 
her  life  work.  She  accepts  the  position  in  the  hope  that 
it  will  not  be  necessary  to  pursue  that  kind  of  work  for 
any  considerable  length  of  time.  She  hopes  to  escape  by 
getting  married. 

But  with  the  young  man  it  is  different.  Marriage  does 
not  offer  to  him  an  avenue  of  escape,  except  in  rare  cases. 
Nor  does  he  see  any  other  way  to  escape.  So  he  begins 
a  wearisome  climb  in  the  hope  of  becoming  a  high-class 
salesman  on  the  pay  roll  of  the  department  store  syndicate 
at  $15.00  a  week.  He  diligently  acquires  all  of  the  sneak- 
ing arts  of   the   underling   tradesman.      Manhood   is   de- 


240  WHY  THE  CAPITALIST? 

based,  character  broken,  and  servility  is  stamped  upon 
every  one  of  his  features.  Many  a  week  his  record  of 
sales  falls  just  a  little  below  the  figures  that  would  bring 
to  him  the  coveted  raise.  When  he  succeeds,  the  increase 
at  best  amounts  only  to  one-fifth  of  the  increase  in  profits 
that  his  higher  degree  of  efficiency  has  produced.  Some- 
times his  portion  is  only  one-seventhi  of  that  enhancement 
of  profits  that  he  has  brought  about. 

Despite  the  flood  of  books  and  swarm  of  experts  we 
have  not  all  the  facts.  It  is  not  the  desire  of  the  morgan 
that  we  have  all  the  facts,  and  the  influence  of  his  interests 
has  the  facts  held  back  from  us  as  much  as  possible.  But 
from  the  information  that  we  have,  it  is  easy  to  under- 
stand how  it  is  and  why  it  is  that  the  morgan  is  growing 
huger  all  the  time. 


CHAPTER  XXI. 

THE  CLAIM  THAT  CONDITIONS  ARE  IM- 
PROVING. 

Whenever  the  morgan  as  preceptor,  and  has  panders, 
are  hard  pressed  for  argument  they  invariably  assert  that 
they  have  been  doing  a  great  deal  for  "our  workingmen," 
studying  their  problems ;  and  they  urge  that  they  cannot 
accomplish  everything  at  once  as  an  excuse  for  conditions 
as  they  are.  They  claim  credit  for  giving  the  worker 
a  great  deal  more  than  he  used  to  get.  They  claim  that 
they  are  raising  wages  all  the  time;  that  they  are  con- 
stantly doing  things  to  improve  the  worker's  condition,  his 
health,  his  comfort,  his  education,  and  to  increase  his  hap- 
piness. Then  with  swelling  chest  they  point  to  what  the 
worker  has  today  that  his  great-grandfather  did  not  have. 

The  fact  is  that  the  morgan  has  not  moderated  or  given 
up  a  particle  to  the  worker  or  to  any  order  of  the  gentile 
class  whatever.  On  the  contrary,  he  has  been  growing 
more  resourceful  in  his  perverseness. 

If  sore  eyes  are  not  as  prevalent  now  as  they  were  a 
few  generations  agoj  if  faces  pitted  with  small-pox  are 
less  frequent ;  if  yellow  fever  and  cholera  have  come  to  be 
less  of  a  scourge  and  dread  to  the  worker  and  to  man- 
kind; if  scarlet  fever,  diphtheria  and  other  diseases  of 
childhood  carry  off  a  somewhat  smaller  percentage  of  the 
worker's  children ;  if  there  is  a  little  less  of  malaria  with 
its  accompanying  ills,  no  thanks  are  due  to  the  morgan. 
It  is  not  because  of  him,  but  in  spite  of  him.  It  is  because 
the  workers  in  the  sciences  of  medicine,  hygiene  and  san- 
itation have  been  untiring  in  their  fields  of  labor  to  improve 
and  lift  the  health  of  the  human  race ;  it  is  because  the 

241 


242  WHY  THE  CAPITALIST? 

line  of  workers  in  the  building  trades,  from  the  architects 
to  the  plumbers,  have  been  indefatigable  in  their  labors 
to  render  the  dwelling  places  less  vile,  and  unhealthy; 
it  is  because  the  workers  engaged  in  what  is  called  public 
works,  from  the  civil  engineer  to  the  digger  in  the  ditch, 
have  all  been  doing  as  much  as  they  were  permitted  to  do 
under  the  morgan  regime  to  bring  about  more  healthful 
conditions.  If  the  worker's  teeth  do  not  decay  quite  so 
fast  as  they  used  to  and  thereby  affect  his  health  also,  it 
is  not  because  of  anything  the  morgan  has  done  or  caused 
to  be  done.  It  is  simply  because  workers  have  studied 
and  to  that  extent  developed  the  science  of  dentistry  for 
the  benefit  of  the  human  race.  If  the  food  that  the  worker 
gets  contains  a  little  less  of  the  morgan's  adulterants  for 
profit,  or  is  a  little  less  diseased,  or  a  little  less  putrid, 
it  is  not  at  all  because  the  morgan  has  turned  saint.  It 
is  wholly  because  the  workers  in  food  chemistry  have  been 
so  unremitting  in  the  work  of  exposing  the  boldness,  bald- 
ness and  eventual  unprofitableness  of  these  frauds  and 
their  damaging  effect  upon  the  general  health  and  working 
ability  of  the  worker  that  even  the  morgan's  state  has 
been  constrained  to  concede  some  little  relief  for  the  sake 
of  health  and  profit-producing  work,  so  that  the  supply 
of  efficient  workers  might  not  be  seriously  impaired.  If 
the  houses  of  the  workers  seem  any  less  miserable  than 
they  used  to  be  it  is  not  owing  to  any  consideration  in 
that  respect  by  the  morgan.  It  is  because  the  worker's 
greater  ability  and  better  methods  in  preparing  material 
and  erecting  houses  makes  better  houses  more  profitable 
as  permanent  investments  to  draw  from  the  worker,  in  the 
form  of  interest  or  rent,  more  of  that  part  of  his  allow- 
ance which  he  formerly  needed  in  larger  volume  in  other 
ways.  In  other  words,  just  as  sure  as  one  drain  on  the 
worker's  wages  is  diminished  the  morgan's  system  opens 
up  and  multiplies  other  drains. 


THE  CLAIM   THAT  CONDITIONS  ARE  IMPROVING  243 

The  manufacture  of  household  utilities,  designed,  in- 
vented and  made  by  the  worker  has  been  a  source  of  great 
profit  to  the  morgan  under  his  system  of  manufacturing 
and  selling  for  profit.  But  no  material  benefit  therefrom 
has  accrued  to  the  worker  as  a  worker.  He  is  not  receiv- 
ing one  jot  more  of  the  value  that  he  produces.  But  quite 
to  the  contrary,  he  is  receiving  less  and  less  of  it  all  the 
time.  All  of  the  things  that  the  worker  has  now  that  his 
ancestors  did  not  enjoy  have  been  and  are  produced  by 
the  worker  and  come  to  him  because  they  contain  less 
value  in  spite  of  their  greater  utility.  They  are  cheaper 
and  yield  much  larger  profits  to  the  morgan.  The  cook 
stove  affords  a  much  cheaper  method  of  cooking  food 
than  the  old  style  hearth,  and  the  better  the  cook  stove 
the  greater  the  saving  that  results  from  its  use.  The 
sewing  machine  in  the  home  is  a  great  source  of  revenue 
to  the  morgan,  parading  as  manufacturer  and  seller,  as 
well  as  a  great  utilizer  and  economizer  of  the  worker's 
domestic  resources.  It  also  furnishes  the  morgan  with 
much  greater  profits  in  his  ready  made  clothes  factories 
and  shops.  If  the  worker  should  get  what  seems  to  the 
morgan  more  cotton  goods  than  his  ancestors  got  of  coarse 
linen  and  hempen,  it  is  because  cotton  is  cheaper  and  the 
more  of  it  that  is  used  within  the  morgan's  restrictions, 
the  more  profits  the  morgan  gets.  The  worker  invented, 
made  and  perfected  all  of  the  machinery  and  mills,  and 
he  raises  the  cotton  and  makes  the  cloth  so  much  cheaper 
and  in  such  larger  quantities  that  the  morgan  could  not 
use  it  all,  or  even  destroy  it  by  his  own  efforts,  so  he  reaps 
a  greater  profit  from  it  because  it  is  cheap  and  the  worker 
needs  it  for  use. 

If  the  worker  today  may  eat  wheaten  bread  instead  of 
the  bitter  acorns  that  constituted  the  staff  of  life  of  his 
ancestors  in  Europe  he  need  not  thank  the  morgan  for  the 
change.     Before   the   workers   had   developed   agriculture 


244  WHY  THE  CAPITALIST  ? 

the  titled  morgan's  lands  were  covered  with  extensive 
forests,  consisting  in  great  part  of  oak  trees.  The  morgan, 
then  as  now,  took  all  the  tid-bits  for  himself  and  favorites, 
and  made  the  workers  live  on  mast — that  is,  the  bitter 
acorns  and  beechnuts — and  strange  as  it  may  seem,  our 
forefathers  developed  quite  a  fondness  for  that  diet.  Of 
course,  the  morgan  told  them  that  that  was  the  most 
wholesome  of  foods  for  them.  The  morgan  was  rich, 
and  what  he  said  must  be  true,  they  thought.  So  our 
simple-minded  ancestors  crossed  themselves,  blessed  the 
morgan  and  were  profoundly  grateful  to  him  for  acorns 
to  eat  laden  with  tannin.  As  agriculture  advanced  and  the 
forests  gave  way  to  fields  cultivated  by  the  worker,  with 
the  kind  permission  of  the  morgan,  rye,  oats  and  wheat 
became  a  cheaper  article  of  diet  and  more  plentiful  than 
tannin-laden  acorns  and  beechnuts.  Yet  the  panders  of 
the  morgan  want  us  to  feel  humbly  thankful  to  their 
patron  and  master  for  graciously  bringing  about  the  change 
of  diet. 

We  read  that  during  the  time  of  Charlemagne  such 
things  as  lettuce,  cress,  endive,  carrots,  beets,  turnips, 
onions,  were  only  to  be  found  in  the  emperor's  kitchen- 
garden,  to  be  eaten  by  the  morgans  of  noble  blood ;  that 
Catherine,  one  of  the  wives  of  Henry  VIII,  could  not 
procure  a  salad  for  her  dinner,  as  no  potherbs  were  grown 
in  England,  and  a  gardener  was  brought  over  from  Hol- 
land to  start  a  kitchen-garden.  Was  it  the  gardener  or 
was  it  the  kind  morgan  in  the  guise  of  king  that  did  the 
work?  We  also  read  that  peas  were  unknown  before 
1550  when  a  French  gardener  developed  and  introduced 
them.  It  is  not  so  long  since  our  ancestors  would  not  eat 
tomatoes,  because  these  were  believed  to  be  poisonous,  and 
it  is  more  recently  still  that  we  have  seen  green  peppers 
grow  into  favor  in  America  as  an  article  of  diet. 

How  absurd  and  brazen  for  the  morgan  to  claim  credit 


THE  CLAIM  THAT  CONDITIONS  ARE  IMPROVING  245 

for  the  greater  variety  and  wholesomeness  of  foodstuffs 
developed  by  the  growing  intelligence  of  the  worker  him- 
self! We  read  that  in  colonial  times  the  negro  slaves  in 
tidewater  Virginia  and  Maryland  were  surfeited  with  dia- 
mond-back terrapin,  and  that  in  all  the  colonies  shad 
in  season  was  the  principal  diet  of  the  negroes  and  the 
poor  whites.  Why?  Because  diamond-back  terrapin  and 
shad  were  so  plentiful  that  they  were  the  cheapest  things 
the  workers  could  be  fed  upon,  and  because  these  foods 
were  so  cheap  that  they  did  not  appeal  to  the  discrim- 
inating palate  of  the  morgan. 

Our  common,  ordinary  working  ancestors  used  to  wear 
the  skins  of  wild  animals.  Why?  Because  they  were  the 
cheapest  article  of  clothing  then  procurable.  When  by 
reason  of  the  inventive  genius  and  acquired  skill  of  the 
workers,  woven  fabrics  afforded  a  much  cheaper  article 
of  clothing,  the  worker  got  woven  fabrics.  The  better 
qualities  of  furs  are  now  scarce  and  are  provided  only  for  the 
morgan. 

If  the  workday  has  in  some  few  lines  of  industry  be- 
come a  little  shorter  it  is  not  because  the  morgan  contents 
himself  with  less  surplus  value.  He  does  not.  He  in- 
variably speeds  up  the  machine  to  make  up  for  the  short- 
ening of  the  day  and  thereby  makes  the  work  of  produc- 
tion more  intensive.  If  the  worker  can  have  an  occasional 
trolley  ride  he  is  not  in  the  least  beholden  to  the  morgan 
for  it.  The  whole  of  the  electrical  equipment,  cars  and 
road,  are  the  product  of  the  worker's  brain  and  brawn ; 
and  in  order  to  have  the  price  for  these  rides  the  worker 
must  forego  other  things,  and  because  of  these  additional 
facilities  that  the  worker  now  has  to  go  to  and  from  his 
work,  the  morgan,  besides  getting  the  benefit  of  more  of 
the  worker's  power  gets  larger  profits  from  the  worker 
for  the  use  of  lands  and  lodgings  located  farther  from 
the  factory. 


246  WHY  THE  CAPITALIST  ? 

If  the  worker  may  go  to  a  moving  picture  show  it  is 
not  because  of  the  morgan's  goodness  of  heart,  or  at  his 
expense,  either  directly  or  indirectly.  The  worker  has 
produced  and  developed  the  moving  picture  and  can  have 
a  little  diversion  by  means  of  it,  only  because  it  is  much 
cheaper  than  the  saloon  or  many  other  means  that  the 
worker  was  formerly  compelled  to  resort  to  for  a  little 
much-needed  relaxation.  If  the  worker  can  have  a  news- 
paper it  is  because  the  worker  has  himself  made  the  news- 
paper one  of  the  cheap  means  of  entertainment  and  to 
some  extent  a  substitute  for  other  and  more  expensive 
entertainments,  and  it  is  also  to  some  extent  because  the 
morgan  has  himself  helped  to  make  the  newspaper  cheap 
to  help  his  own  profit-getting  schemes  by  making  it  an 
advertising  medium  for  his  swindling  bargain-counter  en- 
terprises. 

The  foregoing,  it  is  true,  are  only  generalities.  The 
learned  panders  of  the  morgans  will  deny  to  us  the  right 
to  indulge  in  generalities.  They  claim  that  right  for  them- 
selves as  their  exclusive  and  special  privilege  and  prerog- 
ative. 

So  let  us  now  try  to  be  as  definite  and  specific  as  avail- 
able data  will  permit.  It  is  to  be  regretted  that  that  data 
is  not  available  in  such  abundance  as  it  might  well  be. 
But  that  is  not  the  fault  of  the  worker.  It  is  because  the 
morgan's  interests  as  expressed  and  enforced  by  and  through 
his  state  has  willed  it  otherwise.  The  morgan's  interests 
dictate  the  laws  and  the  policies  of  the  government.  But 
still  there  is  sufficient  to  answer  in  a  way  our  requirements. 

The  United  States  Census  of  1890  showed  that  the 
average  worker  in  the  manufacturing  industries  of  this 
country  was  receiving  $442.82.  The  Census  of  1900  tells 
us  that  these  worker's  wages  went  down  to  $437.48,  or 
1.6  per  cent  in  the  ten  years.  It  will  be  remembered  that 
we  had  a  severe  business  depression  which  started  in  1892. 


THE  CLAIM   THAT  CONDITIONS  ARE  IMPROVING  247 

Wages  had  dropped  considerably  lower  than  the  figures 
given  and  were  beginning  to  return  to  their  former  basis 
again  when  the  census  taker  came  along  and  found  the 
wages  back  to  within  1.6  per  cent  of  what  they  were  ten 
years  before. 

But  these  figures  would  be  of  very  little  service  to  us 
if  we  could  not  know  what  the  worker's  wages  would  buy 
for  him.  The  United  States  Bureau  of  Labor  Statistics 
in  its  Bulletin  No.  113,  gives  us  the  relative  prices  of  15 
articles  of  food,  year  by  year,  from  1890  to  1912.  There 
was  some  fluctuation  during  the  hard  times  that  began 
in  1892.  But  by  the  time  of  the  Census  of  1900  retail 
prices  had  become  firm  again  and  had  resumed  their  up- 
ward trend.  Comparing  the  end  of  this  ten-year  period 
with  the  beginning  we  find  that  the  retail  price  of  sirloin 
steak  advanced  5.1  per  cent,  round  steak,  9.6  per  cent; 
rib  roast,  7.5  per  cent ;  pork  chops,  7  per  cent ;  smoked 
bacon,  6.6  per  cent;  smoked  ham,  2.2  per  cent;  hens,  .5 
of  one  per  cent;  lard  declined  1.4  per  cent;  flour  declined 
14  per  cent ;  corn  meal  declined  8  per  cent ;  eggs  declined 
1  per  cent ;  butter  declined  1.6  per  cent ;  potatoes  declined 
9.3  per  cent ;  sugar  declined  17.6  per  cent,  and  milk  de- 
clined 1.6   per  cent. 

For  the  remainder  of  the  period  covered  by  these  re- 
ports the  rise  in  the  prices  of  the  15  articles  of  food  has 
very  few  hesitations,  and  these  are  slight  and  of  too  short 
a  duration  to  have  any  effect.  The  figures  showing  the 
wages  of  the  worker  also  show  a  continuous  rise,  but  by 
no  means  in  keeping  with  the  rise  in  the  price  of  food 
stuff's.  Wages  are  always  falling  farther  and  farther 
behind.  It  is  clearly  shown  that  as  the  worker  advances 
in  intelligence  and  ability  to  do  more  with  the  allowance 
of  wages  that  he  gets,  those  wages  are  reduced  by  the 
depression  of  their  purchasing  power.    What  possible  dif- 


248  WHY  THE  CAPITALIST? 

ference  in  length  can  it  make  if  the  yard  stick  is  short- 
ened at  one  end  or  at  the  other? 

The  statistical  abstract  number  34,  issued  by  the  Depart- 
ment of  Commerce  and  Labor,  imparts  the  information 
that  these  wage  workers  in  the  year  1905  were  receiving 
on  an  average  $477.39,  or  an  advance  of  9  per  cent  over 
what  they  got  five  years  before.  Bulletin  113  shows  that 
during  these  five  years  the  15  articles  of  food  were  ad- 
vanced in  their  retail  prices  at  rates  of  from  6.3  to  34 
per  cent.  Sirloin  steak  advanced  6.3  per  cent,  round  steak 
12.9  per  cent,  rib  roast  10  per  cent,  pork  chops  19  per  cent, 
smoked  bacon  34  per  cent,  smoked  ham  18.8  per  cent,  lard 
19.7  per  cent,  hens  16.6  per  cent,  flour  24.7  per  cent,  corn 
meal  32  per  cent,  eggs  29  per  cent,  butter  10.6  per  cent, 
potatoes  21  per  cent,  sugar  .9  of  one  per  cent,  milk  8.7 
per  cent. 

During  the  next  period  of  five  years,  namely,  down  to 
1910,  the  wages  of  these  workers  advanced  to  an  average 
of  $518.05  per  year,  or  another  8.5  per  cent.  The  advance 
made  in  the  prices  of  foodstuffs  this  time  were  of  amounts 
from  13.7  to  29.4  per  cent.  Sirloin  steak  advanced  13.7 
per  cent,  round  steak  16.4  per  cent,  rib  roast  13  per  cent, 
pork  chops  28.9  per  cent,  smoked  bacon,  27.4  per  cent, 
smoked  ham  19  per  cent,  lard  29.4  per  cent,  hens  20.8 
per  cent,  flour  16.7  per  cent,  corn  meal  17.6  per  cent,  eggs 
18  per  cent,  butter  25  per  cent,  potatoes  12  per  cent,  milk 
17.5  per  cent,  granulated  sugar  declined  .4  of  one  per 
cent  in  price. 

Figures  are  not  available  to  show  the  wages  received 
by  these  workers  subsequent  to  the  Census  of  1910,  and 
therefore  cannot  be  brought  into  comparison  with  the 
prices  of  foodstuffs  given  in  Bulletin  113  for  the  remainder 
of  the  time  down  to  1912  inclusive. 

In  the  twenty  years,  average  wages  advanced  in  the 
manufacturing  industries  from  $444.82  per  year  to  $518.06, 


THE  CLAIM  THAT  CONDITIONS  ARE  IMPROVING  249 

an  increase  of  $73.24,  equal  to  16.5  per  cent.  During  the 
same  period  the  rise  in  the  retail  prices  of  foodstuffs  was 
as  follows :  Sirloin  steak  27  per  cent,  round  steak  43  per 
cent,  rib  roast  33.5  per  cent,  pork  chops  56  per  cent,  smoked 
bacon  82.8  per  cent,  smoked  ham  44.5  per  cent,  lard  52.8 
per  cent,  hens  41.7  per  cent,  flour  25.3  per  cent,  corn  meal 
43.8  per  cent,  eggs  54  per  cent,  butter  35.9  per  cent,  pota- 
toes 22.4  per  cent,  milk  25.7  per  cent,  whilst  sugar  de- 
clined 20.8  per  cent. 

In  1900  the  salaried  employes  in  the  manufacturing  in- 
dustries were  getting  on  an  average  of  $1045.72  per  year. 
In  1910  they  got  $1186.16.  This  was  an  increase  of  13.43 
per  cent  for  the  ten  years,  as  compared  with  40  per  cent 
increase  in  the  price  of  foodstuffs  during  the  same  period. 
Separate  figures  showing  the  compensation  of  salaried  em- 
ployes prior  to  1900  are  not  available  because  intermingled 
with  the  salaries  of  officials  and  in  that  condition  not  of  any 
service  in  this  investigaton. 

The  figures  here  given,  touching  salaries  of  employes  and 
wage  workers,  relate  only  to  manufacturing  industries, 
because  these  are  so  tabulated  by  the  Department  of  Com- 
merce and  Labor.  There  is  ,  however,  another  large  and 
important  contingent  of  which  we  may  also  have  for  our 
enlightenment  some  figures,  albeit  in  another  form.  These 
refer  to  the  railroad  employes.  The  figures  taken  from  the 
statistical  reports  of  the  Interstate  Commerce  Commission 
are  printed  in  the  Department  of  Commerce  and  Labor's 
abstract,  and  cover  the  period  between  1892  and  1910  in- 
clusive. There  are  no  figures  given  for  the  years  1893, 
or  1895,  but  beginning  with  1896  we  have  the  figures 
for  each  year  thereafter  during  the  period. 

In  1892  the  average  pay  of  the  wage  workers  in  the 
employ  of  the  railroads  of  the  country  was  $2.06  a  day. 
In  1910  it  had  increased  to  $2.48  a  day.  showing  an  in- 
crease of  42  cents,  or  20.4  per  cent  for  the  period.    The 


250  WHY  THE  CAPITALIST  ? 

locomotive  engineers  received  the  highest  pay  and  also  got 
the  highest  raise,  both  in  amount  and  in  percentage.  In 
1892  they  received  an  average  of  $3.68  per  day.  In  1910 
their  pay  was  $4.55,  an  advance  of  87  cents  per  day,  or 
23.6  per  cent,  or  3.2  per  cent  more  on  the  dollar  than  the 
average  railroad  wage  workers  got.  Excluding  the  engi- 
neers the  railroad  workers  got  an  average  raise  of  20 
per  cent  during  the  period  between  1892  and  1910. 

Bulletin  113  of  the  United  States  Bureau  of  Labor  Sta- 
tistics gives  a  table  of  simple  and  weighted  relative  prices 
of  the  15  food  articles  for  each  year  from  1890  to  Decem- 
ber, 1912,  taking  the  average  prices  for  1890-1899  as  the 
standard  for  comparison  and  as  the  equivalent  of  100.0. 
Here  is  the  average  for  the  United  States : 

Relative   prices   weighted   accord- 
Simple   Average   Relative   Prices.  ing  to  average  consumption. 
Year.                                     Amount.              Year.  Amount. 

1890    102.0  189O    IOI.9 

1891    103.6  189I    IO3.4 

1892  101.7    1892  101.6 

1893  104.6    1893  104. 1 

1894  99-5  l894  99-2 

1895  97-2  1895  97-1 

1896  94.9  1896  95.2 

1897  96.4  1897  96.7 

1898  99-4  1898  99-7 

1899 100.6  1899  100.8 

1900  102 . 9  1900  103 . 0 

1901  109.5  1901  108. S 

1902  116. 8  1902  114. 6 

1903  116. 9  1903  114. 7 

1904  118. 3  1904  116. 2 

1905  118. 3  1905  116. 4 

1906  122.4  1906  120.3 

1907  138.0  1907  125.9 

1908  132.5  1908  130. 1 

1909  140.3  1009  137-2 

1910  148.5  1910  144. 1 

1911  146.9  1911  1430 

1912  157-9  1912  154-2 


THE  CLAIM  THAT  CONDITIONS  ARE  IMPROVING  251 

The  wages  in  the  manufacturing-  industries  are  not 
stated  for  each  year  and  we  are  therefore  unable  to  con- 
sider their  yearly  changes.  We  are  shown,  however,  that 
these  wages  declined  from  1890  to  1900  to  the  extent  of 
1.6  per  cent.  The  foregoing  table  shows  that  the  differ- 
ence in  food  prices  advanced  at  the  same  time  1.1  per 
cent,  notwithstanding  the  reduction  in  wages.  During 
this  period  there  was  a  great  deal  of  fluctuation,  owing 
to  the  "hard"  times  and  the  full  and  normal  working  of 
our  system  of  society  was  so  intricate  and  involved  that 
we  cannot  follow  it  here  without  becoming  tedious  to  no 
profit.  We  find  that  in  1905  wages  in  the  manufacturing 
industries  had  risen  9  per  cent  above  those  of  1900,  whilst 
the  foregoing  table  tells  us  that  the  rise  in  the  prices  of 
necessary  food  stuffs  was  13  per  cent.  By  1910  wages  in 
these  industries  had  gone  up  8.5  per  cent  for  the  five  years, 
and  the  necessary  food  stuffs  24  per  cent.  Taking  the 
twenty  year  period,  whilst  these  wages  in  1910  were  16.4 
per  cent  higher  than  in  1890,  the  price  of  food,  averaged 
according  to  consumption,  was  41  per  cent  higher. 

A  better  understanding,  however,  can  be  had  by  show- 
ing the  average  wages  of  the  railroad  workers  in  dollars 
and  cents  as  computed  from  the  figures  we  have,  in  con- 
nection with  the  relative  weighted  prices  of  food  according 
to  the  table.    Here  it  follows : 

In  1892  wages  were  2.06 — foodstuffs  101.6 
In  1894  wages  were  2.025 — foodstuffs  99.2 
In  1896  wages  were  2.02  — foodstuffs  95.2 
In  1897  wages  were  2.01  — foodstuffs  96.7 
In  1898  wages  were  2.05  — foodstuffs  99.7 
In  1899  wages  were  2.04  — foodstuffs  100.8 
In  1900  wages  were  2.06  — foodstuffs  103.0 
In  1901  wages  were  2.07  — foodstuffs  108.5 
In  1902  wages  were  2.10 — foodstuffs  114.6 
In  1903  wages  were  2.17  — foodstuffs  114. 7 
In  1904  wages  were  2.24  — foodstuffs  116.2 
In   1905   wages   were   2.26  — foodstuffs    116. 4 


252  WHY  THE  CAPITALIST  ? 

in  1906  wages  were  2.26  — foodstuffs  120.3 

In  1907  wages  were  2.39  — foodstuffs  125.9 

In  1908  wages  were  2.44  — foodstuffs  130. 1 

In  1909  wages  were  2.43  — foodstuffs  137.2 

In  1910  wages  were  2.48  — foodstuffs  144. 1 

This  shows  an  advance  of  20.4  per  cent  in  the  average 
railroad  men's  wages  in  18  years,  and  an  advance  of  41.8 
per  cent  in  the  price  of  food  stuffs  during  the  same  time. 
The  wages  of  the  railroad  workers,  exclusive  of  the  loco- 
motive engineers,  advanced  20  per  cent;  that  of  the  loco- 
motive engineers  advanced  23.6  per  cent.  Compared  to 
the  advance  in  price  of  the  necessaries  of  life,  even  the 
advance  of  the  locomotive  engineer's  wages  has  a  lean 
and  emaciated  look. 

The  wage  earner  is  constantly  learning  to  manage  with 
a  little  less.  The  morgan  thereby  constantly  gets  more 
and  more  surplus  values.  This  squeezing  process  is  not 
applied  to  the  wage  worker  alone,  but  to  every  person  who 
renders  any  service  of  value  to  society  for  the  living  that 
he  or  she  gets. 

If  the  true  measure  of  the  worker's  wages  is  its  pur- 
chasing power,  then  the  wages  of  the  workers  have  in 
truth  declined,  notwithstanding  the  showing  made  by  the 
covinous  money  terms  so  well  suited  to  dupe  superficial 
observers. 

If  wages  in  the  manufacturing  industries  had  kept  pace 
with  the  cost  of  living,  they  would  have  advanced  41.8 
per  cent  during  the  period  between  1890  and  1910.  That 
would  have  been  just  keeping  even.  But  these  wages  ad- 
vanced only  16.4  per  cent  in  money  terms.  This  means 
that  actual  wages  were  reduced  17.4  per  cent,  through  the 
depression  of  the  purchasing  power  of  the  money  tokens. 

During  the  ten  years  intervening  between  1900  and  1910, 
to  which  our  data  on  salaried  employes  is  restricted,  these 
salaried  employes  in  the  manufacturing  industries  in  like 


THE  CLAIM   THAT  CONDITIONS  ARE  IMPROVING  253 

manner  suffered  a  reduction  in  their  salaries  amountng  to 
19  per  cent. 

The  reduction  suffered  in  like  manner  by  the  average 
railroad  worker  during  the  18  years  between  1892  and 
1910,  according  to  the  figures  furnished  us  by  the  Inter- 
State  Commerce  Commission,  amounted  to  15.5  per  cent. 

Our  railroad  data  covers  a  period  of  18  years,  and  re- 
lates to  16  classifications  of  work.  In  1892  there  were 
815,311  persons  employed  by  the  railroads  of  the  country, 
excluding  officers,  and  1,681,532  in  1910. 

In  1892  the  general  office  clerks  employed  by  the  rail- 
roads received  $2.23  per  day,  and  in  1910  they  received 
$2.40,  an  increase  of  17  cents,  or  7.6  per  cent  in  money 
terms.  But  as  the  retail  price  of  the  necessaries  of  life 
had  advanced  41.8  per  cent,  these  workers  suffered  an 
actual  reduction  of  24  per  cent  in  their  pay.  During  this 
period  the  pay  of  the  station  agents  went  from  $1.82  to 
$2.12,  a  raise  of  30  cents,  or  17.5  per  cent  in  their  nominal 
wages,  and  an  actual  reduction  in  their  real  wages  of  17 
per  cent.  The  pay  of  the  other  station  men  went  from 
$1.68  to  $1.84,  a  seeming  increase  of  16  cents,  or  9.5  per 
cent,  and  an  actual  reduction  of  22.7  per  cent.  The  pay 
of  the  enginemen  rose  nominally  from  $3.68  to  $4.55,  being 
an  increase  in  the  figures  of  87  cents,  or  23.6  per  cent,  but 
an  actual  decrease  in  pay,  amounting  to  12.8  per  cent.  The 
firemen  received  $2.08  in  1892,  and  $2.74  in  1910.  being  66 
cents  more,  or  a  raise  of  31.7  per  cent  in  name,  but  an 
actual  reduction  of  seven  per  cent  in  pay.  The  conductors 
received  $3.08  in  1892  and  $3.91  in  1910,  an  increase  of  83 
cents  or  27  per  cent  in  their  pay  envelopes,  but  an  actual 
decrease  of  10  per  cent.  The  other  trainmen  received  $1.90 
in  1892  and  $2.69  in  1910,  a  difference  of  79  cents  or  41.5 
per  cent.  These  are  the  only  ones  that  did  not  suffer  a  sub- 
stantial reduction.  They  came  out  nearly  even.  Their  loss 
was  less  than  three-tenths  of  one  per  cent.    The  machinists 


254  WHY  THE  CAPITALIST? 

received  $2.29  in  1892,  and  $3.08  in  1910,  an  increase  of 
79  cents,  or  35  per  cent  in  appearance,  but  an  actual  reduc- 
tion of  4.8  per  cent.  The  carpenters  in  1892  received  $2.08 
and  in  1910  $2.51,  a  seeming  advance  of  43  cents  or  20.7 
per  cent,  but  an  actual  reduction  of  14.8  per  cent.  The 
other  shopmen  in  1893  received  $1.72,  and  in  1910,  $2.18,  a 
seeming  advance  of  46  cents,  or  26  per  cent,  but  an  actual 
reduction  of  11  per  cent.  Section  foremen  received  $1.76 
in  1892  and  $1.99  in  1910,  a  seeming  increase  of  23  cents, 
or  13  per  cent,  but  an  actual  decrease  of  20  per  cent.  Other 
trackmen  received  $1.22  in  1892  and  $1.47  in  1910,  a  seem- 
ing advance  of  25  cents  or  20.5  per  cent,  but  an  actual  re- 
duction of  15  per  cent.  The  switchtenders,  crossing  ten- 
ders and  watchmen  received  $1.80  in  1892,  and  $1.69  in 
1910,  a  reduction  in  their  pay  envelope  of  11  cents  a  day, 
or  6.5  per  cent  during  the  18  years,  an  actual  reduction  of 
34  per  cent.  In  1892,  telegraph  operators  and  despatchers 
received  $1.92,  in  1910  $2.33,  an  increase  in  figures  amount- 
ing to  41  cents,  or  21  per  cent,  but  an  actual  reduction  of 
14.7  per  cent.  In  1892  the  "employes  account  floating 
equipment"  received  $2.03  and  in  1910  $2.22,  a  seeming 
advance  of  19  cents  or  nine  per  cent,  but  an  actual  reduc- 
tion of  23  per  cent.  All  the  other  employes  and  laborers,  it 
is  stated  in  the  report  of  the  commission,  received  $1.68 
per  day  in  1892  and  $2.01  in  1910,  a  seeming  advance  of  33 
cents,  or  20  per  cent,  but  an  actual  reduction  of  15  per  cent. 
Thus  it  appears  from  all  of  the  data  obtainable  that  the 
compensation  of  all  the  workers,  with  the  single  exception 
stated,  underwent  a  continuous  reduction  through  the 
period  covered  by  the  governmental  reports.  It  also  ap- 
pears conclusively  that  all  of  the  strikes,  turmoils  and  in- 
dustrial strifes,  often  bordering  on  civil  war,  did  not  suc- 
ceed, in  fact  could  not  succeed,  in  raising  real  wages, 
namely,  the  purchasing  power  contained  in  the  pay  en- 
velope.   All  that  they  accomplished  and  all  that  they  could 


THE  CLAIM  THAT  CONDITIONS  ARE  IMPROVING  255 

accomplish,  was  forced  compromises  with  aggression.  Had 
it  not  been  for  the  wresting  of  these  compromises,  there 
can  be  no  doubt  that  the  full  amount  of  the  reduction  in 
the  purchasing  power  of  wages  through  the  depression  of 
the  purchasing  power  of  the  worker's  money  tokens,  would 
have  been  the  full  29.44  per  cent  during  the  20  years ;  in 
other  words,  the  depression  would  have  been  to  the  full 
extent  of  the  advance  of  the  41.8  per  cent  in  the  price  of 
necessaries. 

It  is  well  to  remember  here  that  in  expressing  reductions 
and  advances  in  percentages  we  are  apt  to  lose  sight  of 
the  important  difference  between  the  amount  of  a  reduction 
and  the  amount  of  an  advance,  though  expressed  in  the 
same  sort  of  terms.  Our  means  of  expression  in  this 
respect  is  defective  and  deceptive.  For  instance,  if  we  take 
an  advance  of  50  cents  on  one  dollar,  we  shall  have  $1.50. 
That  is  an  advance  of  50  per  cent.  But  if  we  deduct  50 
cents  from  $1.50,  the  reduction  is  one  of  only  33  1-3  per 
cent,  though  we  have  only  one  dollar  left.  The  amount  in- 
volved is  50  cents  each  time,  yet  in  the  one  case  it  is  ex- 
pressed as  50  per  cent  and  in  the  other  as  33  1-3  per  cent. 

A  man  who  received  one  dollar  a  day  in  1892  should 
have  $1,418  per  day  in  1910  to  keep  even.  If  his  wages 
remained  at  one  dollar  in  1910,  he  would  be  41.8  cents 
short.  Yet  when  we  desire  to  express  in  terms  of  per- 
centage the  amount  of  the  reduction  in  the  purchasing 
power  of  his  wages,  we  are  compelled  to  say  it  was  29.47 
per  cent.  His  dollar  will  in  1910  buy  only  as  much  as  he 
could  buy  for  70.53  cents  in  1892.  To  give  him  this  29.47 
cents  more,  that  is.  to  advance  him  to  $1.29  17,  would  not 
place  him  where  he  was  formerly,  because  the  29.47  cents 
would  in  1910  buy  only  as  much  as  17.52  cents  would  buy 
in  1892,  which  would  still  be  short  of  his  dollar  of  18  years 
before.  Before  he  could  be  even,  his  dollar  of  1892  would 
in  1910  have  to  be  raised  to  $1,418.    This  would  be  an  ad- 


256  WHY  THE  CAPITALIST? 

vance  in  his  pay  envelope  of  41.8  cents  on  every  dollar.  If 
he  does  not  get  that  amount,  he  will  be  the  loser  of  41.8 
cents.  Yet  we  are  required  to  say  that  the  reduction  that 
he  suffers  amounts  to  29.47  per  cent. 

The  information  afforded  us  by  Bulletin  113,  it  is  true, 
relates  only  to  15  of  the  necessaries  of  life.  But  we  are 
justified  in  assuming  that  the  advance  in  the  average  retail 
price  of  each  one  of  the  other  necessaries  of  life  was  of 
equal  proportion.  Our  common  experience  and  observat;on 
bear  this  out. 

This  means  that  a  carpenter  working  for  a  railroad  in 
1892  received  $2.08  a  day,  the  whole  of  which  it  is  reason- 
able to  assume  he  needed  to  provide  himself  and  family  with 
the  necessaries  of  life.  In  1910  these  necessaries  of  life  had 
advanced  41.8  per  cent.  This  carpenter,  therefore,  in  order 
to  be  in  the  same  relative  position  needed  $2.95  per  day. 
Instead  of  that,  he  got  only  $2.51.  He  was  therefore  44 
cents  short.  Expressed  in  terms  of  percentage,  the  pur- 
chasing power  of  his  wages  was  depressed  14.75  per  cent, 
in  spite  of  the  specious  rise  in  figures  that  took  place  during 
the  18  years. 

Let  us  take  one  more  example,  namely,  that  of  the  loco- 
motive engineers.  They  reecived  $3.68  per  day  in  1892. 
As  the  necessaries  of  life  advanced  in  price  41.8  per  cent 
during  the  next  18  years,  the  wages  of  the  locomotive  en- 
gineers in  1910  ought  to  have  been  $5.22  per  day,  but  in- 
stead of  that  we  see  that  they  received  only  $4.55.  This 
is  67  cents  less  than  they  should  have  had  to  keep  even. 
Therefore,  the  locomotive  engineers  suffered  an  actual  re- 
duction in  the  purchasing  power  of  their  wages  amounting 
to  12.8  per  cent  during  the  18  years  in  spite  of  the  raise 
in  the  figures  expressing  their  pay  in  money  terms.  It  is; 
unnecessary  to  make  any  further  analysis  here  to  illustrate 
the  point.    It  is  merely  a  matter  of  arithmetic. 

The  British  Board  of  Trade  made  an  inquiry  in  1905  into 


THE  CLAIM  THAT  CONDITIONS  ARE  IMPROVING  257 

working-class  rents  and  retail  prices  of  necessaries,  to- 
gether with  the  rates  of  wages  in  certain  widespread  occu- 
pations, taking  within  its  scope  the  largest  possible  number 
of  controlling  localities  in  the  British  Islands.  There  were 
88  localities  covered,  including  London.  The  inquiry  ex- 
tended from  Dover  to  Limerick,  and  from  Plymouth  and 
Devonport  to  Aberdeen.  There  were  three  classes  of  occu- 
pations embraced  in  the  inquiry.  The  first  class  was  that 
of  the  building  trades,  embracing  bricklayers,  carpenters 
and  joiners,  masons,  plumbers,  plasterers,  painters  and  la- 
borers. The  second  class  was  that  of  the  engineering 
trades,  embracing  fitters  and  turners,  pattern  makers,  iron 
molders  and  laborers.  The  third  class  was  the  printing 
trade,  embracing  compositors. 

The  inquiry  was  repeated  in  1912.  The  report  com- 
pared the  results  obtained  in  1912  with  those  of  1905.  The 
comparison  shows  the  steady  rise  in  the  prices  of  neces- 
saries, weighted  according  to  consumption,  and  the  same 
lagging  behind  of  the  money  tokens  that  the  worker  gets 
in  his  pay  envelope.  The  constant  and  continuous  reduc- 
tion in  the  worker's  actual  wages,  namely,  his  purchas- 
ing power,  is,  according  to  the  record,  as  little  open  to 
doubt  in  Great  Britain  as  it  is  in  the  United  States. 

The  report  says  in  its  introduction :  "It  will  be  observed 
that  no  attempt  has  been  made  to  show  the  course  of  wages 
except  for  the  period  1905-1912  in  a  limited  number  of  oc- 
cupations in  which  men  find  employment  in  nearly  all 
towns."  Again  the  introduction  says :  "A  two-fold  purpose 
is  served  by  the  present  Enquiry.  As  in  1905.  it  permits  of 
a  comparison  of  the  relative  levels  of  rents  and  retail  prices 
and  of  the  rates  of  wages  in  the  selected  trades  in  the  sep- 
arate towns.  Further,  it  records  the  amount  of  change  in 
rents  and  retail  prices,  and  in  rates  of  wages  in  the  selected 
trades  between  1905  and  1912." 

It  is  to  be  regretted  that  the  British  Board  of  Trade  did 


258  WHY  THE  CAPITALIST? 

not  extend  its  inquiry  into  the  mining-,  manufacturing  and 
agricultural  districts.  But  we  must  be  thankful  for  all  that 
we  can  get  from  the  morgan  and  his  system. 

The  summary  of  this  British  report  says  that  the  advance 
of  the  retail  prices  of  food  and  coal,  weighted  according  to 
consumption,  "in  80  of  the  88  towns  varied  from  10  to  18 
per  cent.  In  38  towns  it  was  13,  14,  or  15  per  cent.  The 
minimum  advance  was  7  per  cent  at  Portsmouth,  and  the 
maximum  advance  was  20  per  cent  at  Stockport."  The  re- 
port says :  "The  somewhat  wide  range  of  changes  in  prices 
is,  in  the  main,  a  matter  of  locality ;  the  greatest  mean  in- 
crease was  in  Lancashire  and  Cheshire  (15.8  per  cent)  and 
the  least  in  the  Southern  Counties  (9.8  per  cent).  In  Lon- 
don the  increase  amounted  to  12  per  cent  in  the  inner  and 
middle  zones,  and  10  per  cent  in  the  outer  zone.  For  the 
other  geographical  groups,  the  mean  increases  fell  within 
the  narrow  limits  of  12.4  and  15  per  cent." 

"The  mean  of  the  changes  in  prices  (of  necessaries)  in 
the  88  towns  amounts  to  13.7  per  cent,  and  this  percentage 
holds  true  if  the  figures  for  the  separate  towns  be  weighted 
in  accordance  with  their  populations  and  London  be 
omitted ;  if  London  be  included,  the  weighted  percentage 
increase  is  reduced  to  13  per  cent." 

"There  was  an  increase  in  rents  and  retail  prices  com- 
bined, between  1905  and  1912,  in  every  town  investigated. 
The  amount  of  the  advance  ranged  from  5  per  cent  at  Swin- 
don to  17  per  cent  at  Waterford,  but  in  58  of  the  88  towns 
it  amounted  to  10,  11,  12  or  13  per  cent.  For  16  towns, 
mainly  in  the  South  and  East  of  England,  the  increase  re- 
corded was  less  than  10  per  cent,  and  for  14  towns,  mainly 
in  Lancashire  and  Cheshire,  it  exceeded  13  per  cent. 
Grouping  the  towns  geographically  the  greatest  mean  per- 
centage increase  occurred  in  Lancashire  and  Cheshire 
(13.3)  and  the  minimum  increase  (of  8  to  9  per  cent)  in 
London  and  the  Southern   Counties. 


THE  CLAIM  THAT  CONDITIONS  ARE  IMPROVING  259 

"Taking-  the  mean  of  the  percentage  changes  between 
1905  and  1912  in  rents  and  retail  prices  combined  in  each 
of  the  88  towns,  an  increase  of  11.3  per  cent  is  arrived  at, 
and  if  the  figures  for  the  various  towns  be  weighted  in  ac- 
cordance with  their  populations  the  resultant  average  is 
almost  unchanged,  viz.,  11.2  per  cent  if  London  be  omitted. 
The  inclusion  of  London,  however,  with  its  six  million  in- 
habitants, would  reduce  the  percentage  increase  for  rents 
and  retail  prices  combined  to  10.3  per  cent. 

"The  data  which  have  been  collected  in  regard  to  the 
cost  of  clothing  during  the  years  1905-1912,  show  that  the 
price  of  clothing,  including  boots,  has  risen  during  the  past 
eight  years.  No  general  percentage  increase  can  be  given, 
but  it  seems  clear  from  the  various  tests  applied  to  both 
the  raw  materials  and  the  manufactured  articles,  at  dif- 
ferent stages,  that  the  rise  has  not  been  much  less  for  the 
same  quality  of  article  than  for  food,  coal  and  rent  com- 
bined." 

As  to  wages,  the  report  summarizes  that  "although  in 
many  towns  rates  of  wages  were  at  the  same  level  in  Octo- 
ber, 1912,  as  in  October,  1905,  there  was,  on  the  whole,  a 
distinct  upward  movement  in  each  of  the  selected  trades 
between  the  dates  of  the  two  Enquiries.  The  means  of  the 
percentage  changes  recorded  for  the  separate  towns  show 
increases  as  follows:  Building  trade,  skilled  men,  1.9,  la- 
borers, 2.G ;  engineering  trade,  skilled  men,  5.5,  laborers, 
3.9 ;  printing  trade,  compositors,  4.1." 

Thus  we  have  it  again  from  morgan  sources  that  whilst 
the  prices  of  living  necessaries  went  up  10.3  per  cent  in 
Great  Britain  during  a  period  of  8  years,  that  which  is 
called  wages  advanced,  in  the  most  favored  occupations, 
5.5  per  cent  only,  and  in  the  least  favored  occupation,  1.9 
per  cent  only.  This  means  that  during  the  eight  years,  the 
actual  wages,  namely  the  purchasing  power  of  the  pay  en- 
velope, declined.     The  skilled  men  in  the  building  trade 


260  WHY  THE  CAPITALIST  ? 

found  that  the  same  amount  that  they  could  buy  in  October, 
1905,  for  $10,00,  cost  $11.03  in  October,  1912.  For  this 
their  $10.00  had  been  raised  to  $10.19.  In  other  words, 
they  had  suffered  an  actual  reduction  of  84  cents  in  every 
$10.00  of  their  wages  of  the  year  1905,  despite  the  fact  that 
the  figures  opposite  their  names  on  the  pay  roll  were  larger. 

The  laborers  in  the  building  trades  suffered  a  reduction 
in  the  same  way.  Their  $10.00  of  1905  that  should  have 
been  $11.03  in  purchasing  power  in  1912,  were  only  $10.26. 
So  they  found  themselves  77  cents  short.  They  had  to 
manage  with  the  smaller  sum,  and  are  now  told  by  the 
British  Board  of  Trade  that  their  wages  are  having  "a  dis- 
tinct upward  movement." 

The  skilled  men  in  the  engineering  trade  fared  better 
than  all.  These  got  a  5.5  per  cent  raise  in  their  pay  en- 
velope with  which  to  meet  the  10.3  per  cent  raise  in  neces- 
saries. So  their  $10.00  of  1905  that  should  have  been  $11.03 
were  $10.55.  Therefore  their  reduction  on  every  $10.00 
of  1905  was  only  48  cents. 

The  printers  and  the  laborers  in  the  engineering  trades 
stood  pretty  close  together.  The  printers  lost  62  cents  from 
the  purchasing  power  of  every  ten  dollars  in  wages  of 
1905,  and  the  engineering  laborers  64  cents. 

No  one  will  accuse  any  of  the  men  who  gathered  the  data 
of  this  chapter,  either  in  Great  Britain  or  in  the  United 
States,  with  trying  to  favor  the  gentile  as  against  the  mor- 
gan. 


CONCLUSION. 

The  gentiles  are  all  slaves  of  the  morgan  under  his  sys- 
tem. The  personality  of  the  morgan  for  the  time  being 
cannot  be  of  the  least  consequence.  Whether  one  man  or 
another  is  the  morgan,  it  is  caesarism  just  the  same;  and 
whether  he  was  lifted  on  the  shield  of  the  Pretorian 
Guards,  was  placed  in  his  position  as  heir  of  his  father, 
"got  there"  by  bribery  or  by  murder  or  by  some  manner  that 
might  be  deemed  meritorious,  cannot  make  the  dominance 
any  the  less  caesarian. 

Those  gentiles  that  are  of  the  second  order  and  popu- 
larly called  the  middle  classes,  those  that  get  their  liveli- 
hood by  some  work,  eked  out  and  assisted  by  a  little  "cap- 
ital" with  which  they  exploit  the  gentiles  of  the  first  order, 
are  slaves  under  the  morgan  system  just  as  the  gentiles  of 
the  other  orders  are.  If  the  limbs  and  bodies  of  these  mid- 
dle class  gentiles  in  the  second  order  be  not  so  much  galled 
and  calloused  by  their  bonds  and  manacles,  the  calluses  on 
their  minds  make  up  for  it  many  times. 

The  so-called  middle  classes  imagine  themselves  cap- 
italists, although  they  are  compelled  to  get  their  livelihood 
in  large  part  by  their  personal  exertion.  Much  of  that  per- 
sonal exertion  is  devoted  to  driving  and  oppressing  the 
gentiles  of  the  first  order ;  and  even  at  that,  they  -do  not 
get  anything  like  what  they  should  have  out  of  life  com- 
pared to  the  amount  of  exertion  they  put  forth,  or  com- 
pared to  what  they  would  get  were  they  able  even  without 
any  "capital"  of  their  own  to  direct  their  efforts  entirely  to 
value-producing  ends,  instead  of  directing  them  in  most 
part  to  value-filching  ends  as  at  present.  The  so-called 
middle  classes  constitute  the  buffers  between  the  morgan 
and  the  gentiles  of  the  first  order.  The  wearing  life  of  thq 

261 


262  WHY  THE  CAPITALIST  ? 

forager  is  theirs.  They  are  subjected  to  pressure  from 
both  sides.  They  are  constantly  ravaging  the  resisting  gen- 
tiles of  the  first  order,  and  are  in  their  turn  ravaged  by  the 
morgan  of  by  far  the  greater  part,  if  not  all  of  their 
plunder. 

The  gentiles  of  the  second  order  perform  the  service  of 
hunting-dogs  for  the  morgan.  They  are  his  beagles,  hounds 
and  retrievers.  They  get  but  a  small  morsel  of  the  prey 
that  they  bring  to  their  master's  bag. 

Although  the  position  of  the  gentiles  of  the  third  order 
exposes  them  to  the  most  contemptuous  disparagement, 
their  true  interest  as  gentiles  is  with  the  gentiles  of  the 
first  and  second  orders.  There  can  be  no  emancipation 
of  any  one  order  of  the  gentiles  from  the  thralldom  of 
to-day  without  the  emancipation  of  all  three  orders.  All 
three  orders  of  the  gentile  class  are  enslaved.  Be  it  re- 
membered that  Master  Dawkins,  "The  Artful  Dodger," 
Master  Bates  and  Bet  and  Nancy  were  all  of  them  also 
the  victims  of  Mr.  Fagan,  the  "respectable  old  gentle- 
man" that  Dickens  tells  us  about,  although  they  accepted 
him  for  their  pattern  and  teacher  in  their  chosen  business 
of  lying  and  stealing.  Their  choice  was  not  a  free  choice., 
but  it  was  imposed  upon  them  by  their  environment. 

I  stated  above  that  the  calluses  on  the  minds  of  these 
gentiles  of  the  second  order  called  the  middle  classes  make 
up  for  the  absence  of  calluses  on  their  limbs  and  bodies. 
There  is  nothing  more  pitiable  than  the  average  mind 
found  among  the  shop-keepers  and  wage-slave  drivers. 
Their  habits  of  thought,  th'eir  occupation  and  environ- 
ment have  so  foreshortened  their  minds  that  they  canno^ 
view  anything  otherwise  than  with  an  eye  to  individual 
gain.     They  measure  everything  by  the  dollar. 

The  tribute-taking  morgan,  whether  slave-catcher,  slave- 
owner, proprietor  of  baronage  or  of  mines  or  of  factories, 
or  of  any  of  the  resources  of  nature  or  the  means  of  pro- 


CONCLUSION  263 

duction  or  the  agencies  or  means  of  distribution  or  ex- 
change, in  all  his  multifarious  masks,  is  worse  than  an  un- 
necessary incumbrance  in  this  day  and  age.  His  one  aim 
and  object  has  always  been  and  is  the  seizing  of  power 
over  others.  It  cannot  be  even  said  to  his  credit  that  his 
rapacity  was  or  is  for  his  own  personal  gain  or  benefit, 
though  he  may  stupidly  think  that  to  be  the  case.  When 
a  man  has  everything  that  he  can  possibly  want  for  his 
personal  comfort  and  enjoyment  he  can  gain  nothing  addi- 
tional by  claiming  the  right  of  disposal  over  more.  When 
he  acquires  such  power  as  that,  he  gets  only  one  thing, 
and  that  is  power  to  domineer  over  other  people's  lives. 

The  morgan's  dominance  is  the  cause  of  all  that  society 
is  suffering  from  to-day.  All  we  need  is  to  understand 
this.  Then  we  shall  soon  find  ways  and  means  to  throw 
off  his  rule.  We  are  ground  into  the  earth  by  that  power 
which  intercepts  production,  seizes  the  resources  of  nature 
and  the  tools,  and  thereby  dictates  the  conditions  under 
which  the  rest  of  mankind  must  live. 

Most  gentiles  are  still  obsessed  with  the  idea  that  we 
cannot  get  on  without  a  morgan  for  our  master.  However 
that  may  have  been  in  ages  past,  we  do  not  need  him  now. 
The  feudal  lord  ostentatiously  made  himself  necessary  as 
a  sham  protector  for  a  long  time  after  all  real  need  for  his 
services  had  ceased.  But  there  came  a  time  when  he  could 
not  make  himself  seem  necessary  any  longer,  and  he  had 
to  go.  He  was  sloughed  off  just  as  nature  sloughs  off  all 
dead  limbs  and  useless  members. 

When  a  limb  on  a  tree  dies,  the  wood  in  that  limb  grad- 
ually loses  its  tensile  strength  until  finally  a  gust  of  wind 
blows  it  down,  or  it  breaks  off  and  falls  of  its  own  weight. 
A  competent  forester  will  not  wait  until  the  dead  limb 
falls  of  its  own  weight.  He  detects  the  dead  wood  long 
before  it  is  ready  to  fall  and  notes  when  the  limb  begins 
to  die.     He  knows  then  that  if  this  useless  wood  be  per- 


264  WHY  THE  CAPITALIST  ? 

mitted  to  remain  on  the  tree  it  will  impair  the  growth  of 
the  tree  as  well  as  its  health.  So  the  forester  removes  the 
dead  and  dying  wood  as  fast  as  it  appears.  He  does  not 
thereby  hamper  or  impede  nature.  He  removes  the  ob- 
structions from  her  course  so  that  she  may  operate  more 
freely  in  her  work  of  production. 

The  farmer  in  cultivating  his  field  does  not  obstruct  the 
course  of  nature.  He  wants  more  potatoes.  His  efforts  are 
to  clear  his  field  of  the  things  and  growths  that  draw  sus- 
tenance away  from  the  potato  plants,  or  otherwise  prevent 
them  from  bearing. 

The  morgan  is  dead  wood  now,  he  is  an  obstruction,  an 
encumbrance.  He  impedes  and  obstructs  the  further 
growth  of  human  society.  Worse  than  that,  this  dead  sub- 
stance has  become  a  foreign  substance,  as  much  out  of 
place  as  a  thorn  in  a  living  hand.  It  has  already  produced 
a  festering  sore. 

The  morgan  has  not  for  a  long  time  furnished  and  does 
not  now  furnish  any  "brains"  for  useful  work.  He  does 
not  and  has  not  for  a  long  time  furnished  any  of  the 
"brains,"  mediocre  though  they  be,  that  sustain  his  in- 
stitution. These  "brains"  are  all  supplied  for  hire  by  the 
mercenary  gentiles  of  the  third  order. 

The  gentiles  supply  all  of  the  workers,  including  both 
the  brain  workers  and  the  manual  workers,  if  we  concede 
here  an  essential  difference.  They  supply  the  artists,  inven- 
tors, writers,  teachers,  architects,  engineers,  superin- 
tendants,  mechanics,  laborers,  farmers,  miners,  clerks,  por- 
ters and  distributors.  They  furnish  the  great  mass  of 
workers  also  that  do  the  wholly  unnecessary  work  that  the 
morgan's  rule  dictates.  On  the  other  hand,  the  activities 
of  the  morgan  are  all  designed  and  calculated  for  show, 
and  to  dominate  industry  and  thereby  to  domineer  over  the 
human  race. 

There  is  not  the  slightest  reason  to  suppose  that  those 


CONCLUSION  265 

who  now  do  all  the  work,  both  mental  and  physical,  for 
the  reward  of  a  bare  living,  would  not  be  able  to  do  the 
same  work,  as  well  as  they  do  it  now,  if  we  cut  off  the 
morgan's  power  and  let  him  take  his  place  among  the  gen- 
tiles. All  indications  are  that  the  value-producing  gentiles 
will  be  able  to  do  very  much  better  when  the  incubus  shall 
have  been  removed. 

With  the  emancipation  of  labor  from  the  bonds  of  use- 
less and  wasteful  work  and  the  opening  of  more  and  greater 
opportunities  for  useful  and  productive  occupation,  that 
would  result  from  the  tearing  away  of  the  morgan's  bar- 
riers and  drains,  there  would  come  a  new  dispensation. 
With  the  morgan  dethroned,  one  general  result  would  be 
inevitable.  All  artificial  restrictions  for  purposes  of  private 
profit  would  fall  away,  resulting  in  a  natural  scientific  regu- 
lation based  upon  an  unhampered  understanding.  It 
would  not  and  could  not  be  for  any  purpose  of  controlling 
prices  or  markets.  It  could  only  be  for  the  purposes  of 
natural  and  necessary  production,  for  there  would  not  be 
any  private  countervailing  interest. 

With  the  enormous  profits  of  the  morgan  eliminated,  and 
production  emancipated  from  his  rule,  there  would  be  such 
an  abundance  for  all,  as  no  man  to-day  can  compute  or 
appraise.  No  one  could  then  strut  over  the  necks  of  others. 
In  the  absence  of  any  interest  adverse  to  co-operation  there 
would  not  and  could  not  be  any  influence  adverse  to  co- 
operation. It  is  perfectly  safe  to  say  that  every  one,  even 
the  mediocre,  could  live  upon  a  basis  that  under  present 
conditions  requires  an  income  of  $5,000.00  a  year  for  each 
household.  The  number  of  those  in  the  United  States  who 
can  have  so  good  a  living  now  is  less  than  one  per  cent. 

When  the  national  law  taxing  incomes  over  $3,000.00 
a  year  of  the  unmarried  and  over  $4,000.00  a  year  of  the 
married,  was  recently  enacted,  the  news  despatches  stated 
that  it  was  estimated  by  the  administration  at  Washington 


266  WHY  THE  CAPITALIST? 

that  only  about  425,000  of  the  100,000,000  people  in  the 
United  States  could  be  required  to  pay  the  new  tax. 

It  is  futile  to  try  to  give  any  detailed  description  of  the 
future  state  or  society.  When  James  Watt  invented  the 
steam  engine,  he  could  not  have  foretold  the  results  that 
we  now  see  of  the  utilization  of  the  power  in  the  expan- 
sive property  of  steam.  Neither  he,  nor  any  one  else 
could  have  described  a  modern  express  train  or  trans- 
atlantic steamer.  It  would  have  been  silly  and  unfair  to 
have  asked  him  to  do  so.  It  would  have  been  equally 
foolish  if  Watt  had  tried  to  foretell  all  that  the  develop- 
ment of  steam  power  has  brought.  Yet,  nothing  that  Watt 
could  have  been  led  into  saying  could  have  in  the  least 
degree  detracted  from  the  efficacy  of  steam  power  as  a 
civilizing  influence. 

When  those  of  our  ancestors  who  were  not  content  with 
the  crab  apple,  or  the  stunted  horse,  or  the  pig,  or  the  ox 
of  their  day,  began  to  study  those  subjects  methodically 
and  to  apply  scientific  knowledge  thus  obtained,  and  to 
that  extent  to  rely  less  upon  mere  luck  for  better  crops 
and  better  fruit,  better  meat  and  better  work-animals, 
they  could  not  have  described  any  of  the  many  kinds  of 
apples  that  are  produced  to-day,  or  any  of  the  better 
work-animals  now  available. 

When  a  man  sets  out  an  orchard,  he  cannot  give  a  de- 
tailed description  of  the  trees  that  in  later  years  he  ex- 
pects to  gather  fruit  from.  If  he  has  made  an  intelligent 
study  of  arboriculture,  he  will,  at  the  most,  be  able  to  give 
only  such  a  general  forecast  as  to  make  it  reasonably  safe 
to  assume  that  the  results  will  pay  for  the  labor  and  out- 
lay in  planting  and  attending  the  orchard. 

No  artist  could  paint  a  portrait  of  a  man  as  he  will  be 
twenty-five  years  hence,  just  from  viewing  the  new-born 
child.' 

The  wildest,  or  most  disorderly  portrayal  by  anyone,  of 


CONCLUSION  267 

the  society  that  will  result  from  the  taking  over  of  our 
own,  and  the  administering  of  it  for  our  own  common 
good,  cannot  afford  the  least  argument  against  our  right 
to  take  over  our  own.  Detailed  forecasts  of  the  future  so- 
ciety, so  far  as  present  discussion  is  concerned,  might  all 
be  placed  in  the  same  category  with  the  idle  talk  of  "What 
I  would  do  if  I  were  a  multi-millionaire." 

There  is  but  one  primal  thing  to  do,  and  that  is  to  de- 
throne the  morgan.  This  can  be  done  only  by  abolishing 
all  property  rights  in  the  resources  of  nature  and  the 
means  of  social  production.  From  land  owner  to  banker, 
the  morgan's  reign  must  cease. 

It  is  necessary  here  to  understand  also  that  with  the 
overthrow  of  the  morgan's  rule  it  will  be  vitally  necessary 
to  have  a  sane  and  scientific  administration  of  affairs  for 
the  common  good,  introduced  at  once.  This  must  be,  in 
order  to  prevent  a  recurrence  of  the  morgan's  reign.  The 
essential  feature  of  morgan  rule  is  authority  exercised 
"from  above."  The  basic  principle  of  this  new  administra- 
tion must  be  that  all  authority  must  come  up  from  the 
"bottom,"  as  it  did  in  the  times  of  our  gentile  ancestors. 

Unless  such  a  principle  of  administration  be  understood 
and  introduced  at  once  when  the  morgan  is  overthrown, 
the  morgan  will  return  to  power.  The  cunning  and  strate- 
gem  of  politicians  will  restore  him.  If  any  one,  or  any  set, 
be  entrusted  with  the  exercise  of  authority  to  formulate 
and  enforce  policies  of  administration,  it  must  be  ex- 
pected that  he  or  they  will  at  once  begin  to  construct  a 
political  machine,  or  organization,  to  domineer,  to  en- 
trench himself  or  themselves  and  to  perpetuate  them- 
selves in  that  authority.  Therewith  and  in  them  the  mor- 
gan would  appear  again. 

The  administrative  policies  could  not  be  otherwise  than 
simple  when  all  of  the  tangled  skein  of  "business"  shall 
have  been  thrown  aside.    Then  too  a  higher  intelligence  in 


2G8  WHY  THE  CAPITALIST  ? 

all  men  must  inevitably  result  from  a  better  life  and  more 
leisure.  Under  such  conditions  the  deciding  upon  adminis- 
trative policies,  and  upon  directions  for  those  chosen  to  at- 
tend to  the  co-ordination  of  the  different  departments  of 
any  industry  and  of  the  different  industries,  should  not 
present  any  difficulties  whatever.  With  the  matters  of  each 
industry  left  to  the  decision  of  those  in  that  industry,  we 
should  soon  have  all  of  our  affairs  administered  by  experts 
in  their  respective  lines. 

The  rest  will  follow  as  a  natural  consequence.  When 
there  shall  be  no  longer  any  private  ownership  in  the  re- 
sources of  nature  or  in  the  means  of  production,  there  will 
not  be  any  legitimate  interest  in  private  control.  When 
there  shall  be  no  opportunity  for  anyone  to  hold  the  re- 
sources of  nature  or  the  means  of  production,  as  his  private 
property,  vast  private  fortunes  will  be  impossible.  There 
will  be  no  lure  to  the  acquisition  of  vast  private  fortunes. 
Though  every  man  may  then  be  conceded  the  right  to  buy 
and  own  an  automobile,  he  will  not  have  the  right  to  ac- 
quire or  own  the  automobile  factory,  or  to  corner  the  au- 
tomobile market.  Though  every  man  may  then  own  as 
many  suits  of  clothes  as  he  likes,  he  will  not  be  permitted 
to  own  the  woolen  mills  or  the  cotton  mills  or  any  other 
mills  or  factories  where  other  men  work,  or  to  seize  and 
own  all  of  their  product  so  as  to  intercept  distribution  or 
to  oppress  others  or  to  take  private  profit  from  the  labor 
of  others.  It  will  make  no  difference  how  much  "money"  a 
man  may  have,  he  will  not  be  able  then  to  acquire  any  of 
the  sources  that  supply  the  things  that  the  rest  of  humanity 
must  have  to  satisfy  their  wants.  He  will  have  no  more 
right  or  opportunity  to  acquire  such  things,  as  his  private 
property,  than  he  has  today  to  acquire  ownership  of  the 
Capitol  building  at  Washington  or  the  Post  Office,  or  any 
other  public  building. 

One  might  reasonably  expect  that  under  such  conditions 


CONCLUSION  269 

a  great  fortune,  so-called,  would  have  no  attraction,  that 
man's  activities  would  be  turned  from  the  grabbing  and 
gambling  business  to  the  arts  of  producing  the  best  comfort- 
affording  and  pleasure-giving  goods.  It  will  not  be  un- 
reasonable to  expect  that  the  haggling,  bartering  and 
huckstering  of  to-day  will  cease  because  antiquated  and 
outgrown,  and  a  waste  of  time  and  labor;  that  distribution 
will  be  scientific  and  simple,  that  each  member  of  society 
will  receive  according  to  his  needs,  and  perform  according 
to  his  ability. 

We  must  bear  in  mind  that  every  human  being  is  en- 
titled to  his  share  of  the  free  goods  of  nature  whether  he 
works  or  not.  No  one  would  think  of  shutting  off  the  air 
from  anyone,  or  of  depriving  him  of  sun-light  or  sun-heat 
or  of  water  or  of  the  pull  of  the  earth  that  holds  him  to 
the  planet  simply  because  he  does  not  work.  No  one  would 
seriously  urge  that  society  has  a  right  to  inflict  any  such 
pains  and  penalties.  The  right  of  every  individual  to  par- 
take freely  and  without  measure  of  the  things  enumerated 
will  be  conceded  by  all.  There  is  however  no  difference 
between  our  right  to  those  things  and  our  right  to  the  rest 
of  the  free  goods  in  nature's  vast  store-house. 

The  robin  goes  to  market  without  any  money,  without 
any  collateral  security,  and  without  credit.  Yet  he  brings 
home  food  for  his  family.  He  builds  his  nest  without 
renting  or  buying  the  land  or  the  fork  in  the  tree,  and 
without  paying  anything  for  the  raw  material.  The  food, 
the  tree  and  the  raw  material  are  furnished  by  nature,  free 
for  all  robins  to  take  according  to  their  needs.  No  robin 
takes  any  more.  No  robin  can  take  any  more.  No  robin 
asserts  a  property  right  in  any  more  than  he  and  his  family 
can  enjoy.  No  robin  forbids  another  robin  to  take  that 
which  he  himself  and  his  family  do  not  need  for  their  com- 
fort and  their  enjoyment  of  life.     No  robin  finds  pleasure 


2?0  WHY  THE  CAPITALIST? 

in  forbidding  other  robins  from  taking  that  which  he  him- 
self does  not  and  cannot  want. 

Are  the  rights  of  human  beings  any  less?  Are  these 
rights  rendered  less  sacred  because  entangled  with  arti- 
ficially created  considerations?  If  it  be  conceded  for  in- 
stance that  the  usefulness  and  the  comfort-giving  qualities 
of  the  free  goods  of  nature  are  increased  from  say  100 
units  to  500  units  by  human  effort  and  attention,  and  if  it 
be  further  conceded  that  some  sane  and  able-bodied  man 
would  refuse  to  work  under  condtions  that  will  insure  to 
him  the  undisputed  ownership  of  all  the  value  that  he  can 
produce,  yet  with  all  that,  this  unimaginable  lazy  man  is 
still  entitled  to  receive  and  to  have  his  full  share,  or  the 
equivalent  of  his  full  share,  of  the  100  units  provided 
spontaneously  by  nature.  If  he  can  content  himself  with 
his  share  of  nature's  100  units,  as  the  robins  do  and  as 
Diogenes  did,  who  can  justly  gainsay  him  the  right  to  do 
so?  Diogenes,  we  are  told,  was  content  to  sleep  under  a 
tub.  Yet  who  will  say  that  he  was  not  within  his  right? 
All  the  known  world  of  that  time  honored  Diogenes.  Still 
he  had  nothing  and  did  not  work  at  anything  considered 
worth  while  by  the  morgan.  Diogenes  would  be  jailed  as 
a  vagrant  were  he  living  among  us  to-day. 

We  have  no  reason  whatever  to  believe  that  there  ever 
will  be  so  many  Diogeneses  or  Rip  Van  Winkles  as  to  have 
any  considerable  influence  upon  society,  or  that  such  an 
influence  would  be  other  than  beneficial. 

The  natural  inclination  and  imperative  need  of  every 
human  being  is  to  be  occupied.  Drudgery  kills.  Purpose- 
ful effort,  without  wearying,  is  pleasurable.  Many  of  us 
are  denied  that  pleasure  by  the  owner  of  the  material  and 
the  tools  needed  for  work.  Many  are  permitted  only  oc- 
casional and  casual  employment  and  that  only  under  con- 
ditions that  are  wearisome.  All  that  get  employment  are 
despoiled  of  fully  five-sixth  of  what  they  produce.    All  are 


CONCLUSION  271 

deprived  of  the  pleasure  that  should  be  found  in  healthful, 
fruitful  employment.  Instead  of  having  that  pleasure, 
they  are  tortured  into  producing  more  and  ever  more  for 
the  morgan's  private  profit.  Therefore  steady  employ- 
ment means  steady  drudgery  for  the  great  majority  of 
productive  workers. 

The  abolition  of  all  property  or  private  control  in  the 
resources  of  nature  and  the  means  of  production  will  as  a 
matter  of  course  have  a  far-reaching  effect  on  the  functions 
of  what  we  now  call  the  state.  It  is  well,  here,  to  be  re- 
minded that  the  state  has  two  chief,  or  general  functions, 
namely,  governmental  and  administrative.  The  govern- 
mental is  at  present  the  principal  and  predominating  func- 
tion. This  is  to  maintain  the  existing  state  of  things  by 
force,  either  applied  or  paraded.  It  is  seen  in  the  sheriff's 
truncheon,  in  the  policeman's  club,  in  the  soldier's  bayonet ; 
it  is  seen  in  swords,  muskets  and  cannons,  all  directed  by 
the  courts,  back  of  which  are  the  statute-making  legisla- 
tures, the  governor,  the  president,  the  king. 

Over  ninety  per  cent  of  the  activities  of  the  govern- 
mental side  of  the  state  arise  out  of  matters  attributable 
more  or  less  directly  to  the  private  ownership  of  the  re- 
sources of  nature  and  the  means  of  production.  Of  the  re- 
maining ten  per  cent  of  the  governmental  business,  it 
might  well  be  said  that  the  greater  part  is  due  indirectly 
to  the  same  cause.  A  very  small  percentage  of  human  ac- 
tivity calling  for  adjudgment  or  avengement,  is  due  to 
"natural  lawlessness"  or  "perversity  of  human  nature"  so 
far  as  anyone  can  now  show.  And  even  this  small  abnor- 
mality may  be  due  to  pathological  conditions. 

When  ninety-five  per  cent  of  the  occasion  for  the  exer- 
cise of  the  governmental  function  of  the  state  shall  have 
fallen  away,  it  would  not  be  unnatural  or  surprising  to  see 
also  ninety-five  per  cent  of  the  governmental  side  of  the 
state  disappear,  dry  up  and  blow  away,  so  to  speak.     We 


272  WHY  THE  CAPITALIST  ? 

should  then  have  realized  Thomas  Jefferson's  expressed 
ideal  that  the  least  government  is  the  best  government,  in  a 
much  fuller  sense  than  Thomas  Jefferson  could  ever  have 
dreamed. 

It  would  also  be  quite  natural  then  to  be  without  wars 
or  thought  of  wars.  Every  war  that  ever  was  waged  grew 
out  of  quarrels  over  private  ownership  of  things  that 
should  not  be  owned  privately.  When  there  will  be  no 
more  "vested"  interests  of  the  morgan  to  protect  in  those 
things,  there  will  not  be  anything  to  fight  about,  and  it 
will  not  be  possible  to  force  any  more  wars  upon  us. 

On  the  other  hand,  the  state's  functions  of  administra- 
tion, now  secondary,  would  doubtless  become  by  far  the 
most  important  functions.  Of  course  this  could  be  a  rich 
field  for  graft  and  corruption  if  there  were  contracts  to 
let,  or  private  "vested"  interests  to  subserve.  But  as  none 
of  these  things  could  be,  there  could  be  no  graft  or  corrup- 
tion, there  could  not  be  any  occasion  for  graft  or  corrup- 
tion. Statesmen  could  not  control  the  patronage  of  even 
a  street  sweeper's  job,  for  every  man  would  have  the  right 
to  work  without  the  "aid"  of  a  statesman  to  get  a  job  for 
him.  His  right  to  work  would  be  as  secure  as  the  right 
of  a  child  to  walk  into  a  school  and  get  an  education. 

Another  result  might  reasonably  be  expected,  it  seems 
to  me  would  be  inevitable.  That  would  be  the  disappear- 
ance of  the  politician.  There  would  be  very  little,  or  noth- 
ing for  him  to  do,  or  to  make  even  a  hollow  pretense  of 
doing.  When  there  are  no  longer  any  adverse  private  in- 
terests to  subserve,  no  contractors'  rings,  no  private  profits, 
no  self-serving  deals  possible,  no  one  will  think  for  a  mo- 
ment of  turning  industry  over  to  the  management  of  alder- 
men, or  of  subjecting  administration  to  law  or  ordinances 
enacted  by  politicians  representing  or  misrepresenting  terri- 
torial districts,  instead  of  representing  industries,  occupa- 
tions or  callings.     There  would  be  nothing  in  it  for  the 


CONCLUSION  273 

politician.  The  politician  would  probably  be  sloughed  off, 
in  short  order,  or  in  greater  part  at  least. 

The  management  and  regulation  of  the  Post  Office  De- 
partment or  of  the  life-saving  service  is  not  now  in  the 
hands  of  the  men  of  "superior  brains"  in  Congress.  The 
Panama  Canal  was  not  dug  by  or  under  the  supervision  of 
congressmen.  Large  corporations  do  not  entrust  the  ad- 
ministration of  their  business  to  men  with  no  other  quali- 
fications than  those  of  being  representatives  of  certain  ter- 
ritorial districts.  The  public  schools  and  fire  departments 
in  the  cities  are  not  conducted  by  or  under  the  superin- 
tendence of  aldermen  representing  territorial  wards.  If 
these  gentry  still  have  something  of  an  evil  influence,  it 
does  not  mean  that  such  influence  would  not  be  completely 
eradicated,  sloughed  off  in  the  natural  way,  if  not  ampu- 
tated. 

The  stream  follows  its  own  course  when  unobstructed. 
So  here,  in  the  absence  of  interests  to  determine  a  dif- 
ferent course,  there  seems  to  be  but  one  general  administra- 
tive policy  possible.  And  that  is  to  have  the  management 
of  every  industry,  occupation  or  calling  intrusted  to  those 
competent  to  manage  that  industry.  That  is  the  easiest 
way.  And  the  most  competent  are  those  engaged  in  that 
industry,  occupation  or  calling.  That  those  engaged  in 
the  shoe  industry  for  instance  are  more  competent  to 
manage  a  shoe  factory  than  any  one  else  can  be  needs  no 
argument  as  a  general  proposition.  They  are  most  able 
to  decide  upon  and  choose  such  managers,  agents  and 
superintendents  as  productive  operation  may  require.  The 
same  is  true  of  all  other  industries,  employments  and  occu- 
pations. 

Representatives  from  the  various  industries,  occupations 
and  callings  could  attend  to  all  matters  of  co-ordination 
without  any  aldermanic  fuss  or  feathers.  Distributors 
could  likewise  attend  to  the  distribution  of  goods.     There 


274  WHY  THE  CAPITALIST? 

could  be  no  inducement  for  anyone  to  intermeddle  in 
things  outside  of  his  line.  He  could  gain  nothing  by  so 
doing. 

The  politician  for  the  most  part  would  be  as  much  out 
of  place  as  the  cat  in  a  strange  garret.  The  laws  would 
probably  be  so  few  and  so  much  simpler  than  even  the  ten 
commandments  are,  that  they  could  be  voted  upon  without 
the  intervention  of  the  politician.  Those  running  the  ma- 
chinery of  the  governmental  side  of  society  would  probably 
have  very  little  to  do,  indeed. 

The  great  problem  of  crowded  cities  might  also  solve 
itself,  or  at  least  might  do  so  in  great  part.  The  amount 
of  human  labor,  human  life  and  material  that  is  now  worse 
than  wasted  in  the  large  cities,  all  as  a  consequence  of  the 
institution  of  private  property  in  the  resources  of  nature 
and  the  means  of  social  production,  is  incalculable. 

"Back  to  the  land"  might  very  well  have  a  different 
sound  and  meaning  when  there  will  be  no  more  exploitation 
of  labor,  and  when  employment  will  no  longer  be  casual ; 
when  every  man  will  have  a  right  to  employment  and  to 
receive  all  the  value  that  he  produces,  besides  his  full 
share  of  nature's  free  goods,  when  no  man  can  call  him- 
self the  private  owner  of  immense  tracts  of  fertile  land,  and 
drive  others  to  choose  between  wage-slavery  in  occasional 
employment,  and  the  performance  of  backbreaking  work 
to  pay  rent,  purchase-price  or  interest,  for  sterile  hillside 
lots ;  when  agriculture,  horticulture,  stock-raising,  etc.,  etc., 
will  be  conducted  with  the  latest  and  best  machinery  and 
implements,  under  the  latest  and  most  scientific  conditions, 
with  social  management ;  when  every  man  will  feel  and 
realize  that  he  is  part  owner  and  will  feel  the  incentive  of 
personal  participation  in  all  the  gain  resulting  from  the 
best  effort  that  there  is  in  him,  put  forth  in  intelligent  co- 
operation with  others,  to  say  nothing  of  the  esteem  of  his 
fellows ;  when  there  will  be  no  master  and  no  mere  hand. 


CONCLUSION  275 

The  marital  relations  will  also  very  likely  be  much  af- 
fected by  the  changed  conditions.  Marriage  to-day  is 
mostly  a  mere  matter  of  convenience.  Gentile  women  of 
the  second  and  third  order  are  taught  to  select  their  mates 
with  a  view  of  getting  husbands  that  have  the  requisite 
gambler's  ability  to  play  the  game  so  that  they  may  be 
assured  of  "respectable"  homes  and  livelihood.  Gentile 
women  of  the  first  order  are  taught  that  they  must  try  to 
get  men  that  can  "make"  a  living  for  them.  Many  women 
want  only  to  make  a  commercially  good  match.  Such  is 
the  teaching  they  receive.  Men  are  influenced  in  taking 
wives  by  the  desire  to  marry  "right."  What  constitutes 
"right"  varies  in  individual  cases.  There  are  millions  of 
gradations,  running  all  the  way  from  a  job  to  a  million 
dollars  in  money.  With  the  women  of  the  morgan  circle, 
it  is  a  matter  of  social  position  based  -upon  wealth. 

When  every  man  and  every  woman  will  have  a  right  to 
a  good  job,  when  the  possession*by  one  of  a  million  dollars 
will  not  give  any  advantage  over  another  in  getting  a  live- 
lihod,  if  we  concede  that  a  man  might  have  a  million,  it 
seems  plain  that  the  consideration  of  such  things  will  not 
and  cannot  enter,  to  any  effectual  extent,  into  the  matter 
of  selecting  a  spouse.  It  seems  quite  natural  that  men  and 
women  will  then  be  drawn  toward  each  other  because  of 
mutual  personal  attractions.  Natural  selections  are  likely 
to  have  freer  play,  the  course  of  nature  to  be  less  diverted 
or  obstructed  than  now  in  the  chosing  of  a  husband  or  a 
wife.  Under  such  conditions  more  marriages  are  likely  to 
be  love  matches  and  fewer  are  likely  to  end  in  the  divorce 
courts. 

It  may  also  well  be  that  the  endless  clatter  of  coin  and 
shuffle  of  paper  money  will  be  considered  useless ;  that  the 
employment  of  thousands  of  human  beings  at  the  keeping 
of  books  of  the  mine  and  the  thine  of  things,  when  there  is 
an  abundance  for  everyone,  will  be  regarded  as  so  much 


276  WHY  THE  CAPITALIST  ? 

useless  and  unnecessary  waste  of  labor.  It  may  well  be 
that  all  such  antiquated  methods  of  wasting  labor  and  ma- 
terial will  abrogated.  It  may  well  be  that  the  difference 
between  present  methods  and  the  methods  then  in  vogue 
will  be  like  the  difference  between  going  into  a  cheap 
restaurant  where  every  lump  of  sugar  is  counted  and  the 
stepping  into  the  banquetting  hall  of  the  prosperous  where 
no  account  is  taken  of  the  things  consumed  by  the  guests. 

These  are  all  matters  of  administration  and  of  detail. 
They  do  not  effect  substance  or  principle. 

It  is  of  no  benefit  to  discuss  now  the  details  or  the 
machinery  of  an  administration  to  be  evolved  in  a  society 
to  result  from  an  abolition  of  private  property  in  the  re- 
sources of  nature  and  the  means  of  social  production.  It 
should  be  sufficient  to  know  that  there  could  be  no  public  or 
private  interest  adverse  to  its  natural  evolution. 

Nor  is  it  of  any  importance  to  discuss  now  the  method 
of  getting  rid  of  the  morgan.  Whether  this  be  by  an 
outright  confiscation  of  his  so-called  property,  with  or  with- 
out pensioning  him  off,  or  by  condemnation  proceedings 
and  compensation,  or  if  his  compensation  be  offset  by 
graded  taxation.  If  he  should  be  paid  a  sum  from  the 
surplus  of  gold,  or  in  paper  or  bonds,  it  would  only  amount 
to  an  empty  ceremony.  The  so-called  money  would  not  be 
of  any  value  to  him.  He  could  not  make  any  use  of  it  after 
he  had  gotten  all  of  the  things  of  life  that  he  could  need 
or  use  for  his  comfort  and  personal  pleasure.  He  could  not 
buy  up  lands  or  railroads  or  mines  or  ships  or  telegraph  or 
telephone  lines  or  mills  or  factories  or  depots  of  distribu- 
tion or  the  supply  of  food  or  clothing  or  any  of  the  other 
things  needed  by  the  rest  of  humanity.  He  would  not  have 
the  right  to  acquire  these  things  in  quanities  for  the  mere 
gratification  of  hoarding  them  or  to  exact  profit,  for  that 
would  be  an  interference  with  the  free  exercise  by  the 
commonwealth  of  its  function  of  production  and  distribu- 


CONCLUSION  277 

tion.  He  would  not  be  permitted  to  corner  even  the  gold 
so  that  the  rest  of  us  could  not  get  enough  of  it  to  fill  our 
teeth  or  supply  other  needs.  The  morgan  could  only  have 
all  the  material  things  that  he  might  possibly  need  for  com- 
fort and  personal  enjoyment.  Beyond  that,  his  "money" 
could  not  reach,  and  therefore  would  be  equivalent  to  mere 
"stage-money." 

It  is  sufficient  to  forecast  that  when  once  we  have 
abolished  private  property  in  social  things,  that  our  ad- 
ministration of  these  things  cannot  be  for  the  purpose  of 
private  profit  of  any  kind  whatsoever.  Private  profit 
would,  to  an  extent,  be  private  property  in  the  things  from 
which  the  private  profit  is  obtained,  and  would  be  hostile 
to  democratic  control  and  management. 

There  can  be  but  one  aim  and  goal  in  the  forward  move- 
ment of  society,  and  that  is  the  complete  overthrow  of 
private  ownership  in  the  resources  of  nature  and  means  of 
social  production,  and  the  inauguration  of  democratic  ad- 
ministration in  place  thereof.  Until  that  is  achieved,  there 
can  be  no  peace. 


INDEX 


PAGE. 

Abolition  of  right  to  acquire 276 

Abundance  for  all 265 

Activities  of  the  gentile  of  second  order 31 

Activities  turned  to  usefulness 

Acquisition,  methods  of  56 

Acorns  as  food   243 

Adding  to  what  Nature  volunteers :>0 

Advance  of  ability  reduces  wages 230 

Administration  and  government 271 

Administration  of  future 267 

Administrative  functions    271 

After  wants  are  satisfied 263 

Agitator  and  fomenter 227 

lAgriculture    79  ;  2  1 1  ;  2 )  I 

Aim  of  the  morgan   26 ;     30 

Aim  of  the  state 35 

Air  as  property  and  value 12 

Air  pressure  43 

Aldermen  and  industry  272 ;  273 

Amount  of  capital  and  profit 99 

Amount  of  property,  fallacy  of 17 

Appearance  of  exploiter 105 

Argument  for  wage  system 53 

Argument  of  necessity  of  property 21 

Artificial  restrictions  to  disappear 22 

Arbitrary  evaluation    9"J 

Art  production 80 

Average  prices  of  food   250 

Authority  from  "above,"  and  from  the  bottom 267 

Axe,  machine  and  factory 87;  88;  90;     91 


il  INDEX 

PAGE. 

Back  to  the  land 274 

Bad  investments 101 

Bank  check 209 

Bank  appropriated   211 

Banks  and  clearing  houses 206 

Banks,  result  of  evolution 212 

Bank  statements  published  216-223 

Bank,  exploitation  by  means  of 225 

Bank  investments 216 

Banking,  clerical  work   212 

Baron,  less  of  a  pretender 104 

Barter 190 

Basis,  for  name  of  "capital" 72 

Beagles,  hounds  and  retrievers   262 

Beating  the  worker  down 142 

Benefit  of  improvement 137 

Bookkeeping  waste 275 

Brains  for  hire  264 

Brains  for  useful  work 264 

"Brain  work"  of  bankers 213 

Brass  buttons  and  brag 48 

Breaking  up  of  gentile  society 25 

British  Board  of  Trade 256 

Buttressing  morganism 35 

Building  a  house 78 

"Buying  labor"   26;  151 

Buying  a  livelihood  179 

Capital  and  profit 99-103 

Capital,  definition  of  50 ;  55 

"Capital"  name  unjustified 52 

Callouses  on  minds   261-262 

Certificates  of  conviction   228 

Chemist  without  means  46 

Change  of  environment 43 


INDEX  in 

PAGE. 

Charity  enslaving  the  mind 229 

Changing  form  of  value 75 

Cheap  premiums  in  charity 229 

Checks  on  banks,  how  charged 206 

Cheat,  the,  outside  of  his  game 231 

Child  labor  107 

Children,  efficiency  of 235 

Church  keeping  gentiles  ignorant 157 

Clearing  house,  process 206 

Co-ordination   273 

Contract,  assumption  false 147 ;  153 

Comparison  of  wages 218-251 

Competent  will  manage 273 

Coal  mines  as  private  property 14-15 

Coal  at  bottom  of  ocean 61 

Coming  of  private  property,  the 25 

Commingling  of  roles  and  characters 6 

Commodities  serving  as  money 201 

Comptroller  of  currency,  reports  of 208 

Confidence  in   money    200 

Confidence  in  commodities   200 

Confession  of  inferiority    229 

Conflicting   interests    6 

Confusion  as  to  point  of  filching 124 

Confusion  of  percentages 255 

Confiscation    or    compensation 276 

Contractor's  rings,  no  more 272 

Control  of  surplus   70 

Cost  of  living  and  wages 124  ;  143  ;  247 

Creating  values  83 

Crowded   cities    274 

Countervailing  interests,   no  more 265 

Cultivating  fields 68 

Currency  legislation    224 


IV  INDEX 

PAGE. 

Darkening  things  that  are  clear 5 

Dead  limbs  on  trees  263 

Description  of  future  society. 266 

Dethrone  the  morgan 267 

Differences  easily  eliminated 21 ;  22 

Dictating  terms  of  life 70 

Diminution  of  productive  workers 30 

Dinner,   preparing    87 

Disease  promotive  of  education 23 

Distributors 273 

"Divine  laws",  purpose  of 39 

Division  of  the  firewood 85 

Dole  of  wages  71 

Dominion  of  man  over  matter 12 

Double  standard  of  value 173 

Dominating  industry  and  race 264 

Educated  to  secure  the  morgan 46 ;  80 

Effect  of  coercion  on  contract 148 

Effect  of  increase  of  output 230 

Efficiency  engineers 230 ;  232 

Enjoyment  of  nature's  bounties 20 

Enormous  profits  eliminated 263 

Enslaved   minds    159 

Equal  access  to  nature's  resources 25 

Erroneous  claim  of  perpetuity   13 

Essence  of  ownership  11 

Evaluation,  guesswork   58 

Evolution  in  exchange   204 

Every  economy  inures  to  benefit  of  morgan 230 

Exchange  of  value,  made  by  man 57 

"Exchange  value"  and  "use  value" 55 

Exclusion,  essence  of  property 13 

Expropriated  gentile   25 


INDEX  V 

PAGE. 

Exploiter,  the 30 

Exploitation  occurs  in  production 144 

Expression,  of  total  value 120 

Extending  the  morgan's  power 71 

Extent  of  property,  fallacy  of 16 

Factory  cannot  be  owned 268 

Factory  method    107 ;  111 

Factory  price  and  retail  price 116 

Failure  to  pay  for  gravitation   15 

Fake    dogmas    48 

Fallacies  of  claim  of  property 16 

False  pretensions  of  capital 82 

Female  labor  107 

"Fetch  and  carry" 50 

Fiction  of  capital  82 

Fish,  uncaught,  not  value 64 

First  order  of  gentiles 28 

Fixed  incomes  and  wages 237 

Food  as  property  12 

Foreign  markets  116 

Forester,  the,  at  work 263 

Free  goods  of  nature 14 ;  269 

"Free"  workers  and  slaves 162 

Freight  boat,   capital    54 

Gambler's  ethics  in  charity  220 

Gentile  society,  when  broken  up 25 

Gentiles  all  of  one  class 27 

Gentiles,  second  and  third  order 47 

Gentile  self  preservation  2'27 

General  result,  the,  inevitable 267 

Getting  husbands   275 

Getting  the  jimmy    100 


VI  INDEX 

PAGE. 

"Getting  more",  a  delusion    169 

Getting  the  means  of  living 179 

Getting  rid  of  the  morgan 276 

Giving  fish  to  my  companion 65 

"Giving  gentile  chance  to  live" 228 

Gold   as  money   194-198 

Gold  displaced  by  paper 199 

Goods,  commodities  and  money 191 

Government  and  administration  271 

Government,  disappearance  of 271 

Gravitation,  value  imparted  to 64 

Great  fortunes  without  attraction  268 

Grouping  the  members  of  society  7 

Growth  of  exploitation 107 

Guises  of  expropriator  25 ;    26 

Handicraft  production    105 

Heaping  up  the  surplus  114 

Hideous  features  created  by  the  morgan 22 

Higher  intelligence  must  result 267 

Hollow  victories  174 

Hope-inspiring  promises    230 

Hopelessness 182 

Horse,  when  "capital"   54 

Horseman  without  a  horse 45 

How  to  throw  off  the  rule 263 

Human  effort  produces  value 62 

Hungry  rats 184 

Hunter,  the,  that  kills  the  deer 68 

Hunting  dogs 262 

"If  I  were  a  multi-millionaire" 267 

Illiteracy,  effect  of  on  wages 164 

Improvements  in  food  stuffs 244 


INDEX  Vll 

PAGE. 

Incentive  of  personal  participation 274 

Increase  of  capital,  table  of 101 

Indolent  minds  easily  satisfied 176 

"Ingratitude"  in  gentile  hearts  228 

Intellectual  mercenaries   34;  48 

Inventor's  disadvantage   45 

Jefferson's   ideal   government 272 

Justice 157 

Keeping  gentile  mind  confused 21 

Kent  on  property  19 

Labor,  all  there  is  of  value 65 

Labor  expended  on  the  free  goods 70 

Labor   legislation    167 

Labor  not  bought    151 

Labor   time    138 

Labyrinth  of  business HI 

"Law"  of  supply  and  demand 176 

Law,  votaries  of   35-36 

Lawless  minds    227 

Laws,  fewer  and  simpler 274 

"Lazy  men"  270 

Led  into  the  jungle  39 

Legal  tender 1^2 

"Legitimate   profits"    98 

"Line  of  credit"  at  bank 213 

Living  basis  under  change 275 

"Loans"  included  in  deposits 213  ;  217 

Lure  to  acquisition,  no  more 268 

Machine  domination 267 

Machine   production    107;  111 


Vlll  INDEX 

PAGE. 

Man's  rights  without  work 269 

Managing  without  the  morgan 264 

Many  denied  the  pleasure  of  work 270 

Marrying  "right"   275 

Marital  relations,  how  affected   275 

"Marginal"  utilities   56 

Maritime  liens 89 

Market  not  to  be  owned 268 

Marx  on  nature  of  value  56 

Mask  crude  and  absurd 73 

Maximum  of  audacity    96 

Meager  portion  of  the  worker 76 

Measure  of  value 66 

Measurements  of  qualities 57 

Measure  of  exploitation   120 

Mental  limitations    43 

Mercenary  forces   29 

Merchant,  a  producer   81 ;  109 

Method  and  sequence  of  labor 83 

Middle  classes  as  buffers 261 

Mill  on  "value"  as  a  term 57 

Mill,  in  his  preliminary  remarks 5 

Military  in  service  of  the  morgan 36 

Minds  calloused 261 ;  262 

Mine  owner   15 

Mobilizing  bank  assets   224 

Money,  a  means  of  confusion 123 ;  150;  190 

Money,  a  medium  of  exchange 190 

Money,  a  means  of  admeasuring  value 122;  208 

Money  a  legal  tender 196 

Money  considered  useless 27  5 

Money  expression  of  value  measurements 123 

Money,  first  goods,  then  commodity 190 

Money,  five  qualities  and  functions  of 192 


INDEX  IX 

PAGE. 

Money,  instability  in  value  of 197 

Money  in  the  future  state 275 

Money,  meaning  of  to  the  worker 172 

Money  of  the  temple  of  moneta 195 

Money  will  be  of  little  use,  when 276 

Morgan  an  obstruction   50 ;  264 

"Morgan,"  meaning  and  derivation 7 

Morgan  class  27 

Morgan  as  consumer   31 

Morgan  as  a  ''brain  worker" 104 

Morgan,  Lewis  H.,  on  property 24 

Morgan  is  not  owner 127 

Morgan's  idea  of  his  profits 126 

Morgan's  power  to  extract  tribute 67 

Morgan's  possessions 92 

Morgan  produces  nothing 105 

Morgan's  precepts  of  right  and  wrong 95 

Morgan's  reign  must  cease 267 

Morgan  stupidity   262 

Motives  that  actuate  man  5 

Movables  of  rare  quality  22 

Mufti,  the,  of  reform 229 

Names  of  "capital" 98 

Name  of  money  does  not  value 197 

Names    to    distinguish 51 

Nature  denies  property  rights 11 

Natural    inclination   to    work 270 

"Natural    lawlessness"    271 

National  banks  at  a  disadvantage 223 

Need  gives  a  temporary  dominion 12-13 

Negro,  the,  and  the  Indian 182 

Nests  without  renting  or  buying 269 

New  names  for  old  things 73 


X  INDEX 

PAGE. 

New    Satan    228 

New  York  courts  on  property 19 

Nitrogen  in  the  air  and  in  food 14 

Object  of  morgan's  being 48 

Obligation  to  "pay"  wages 149 

Offsetting  compensation  by  taxation 276 

Only  producers  and  users  can  own 128 

Opinion  only  basis  of  value,  now 58 

Opportunity  for  useful  occupation 265 

Orchard,  when  set  out  not  foretold 266 

Our    common    inheritance 156 ;  269 

Overlapping  of  interests 6 

Ownership  of  nature's  storehouse,  effect  of 94 

Owner  of  means  owns  ends 46 

Owning  what  our  ancestors  produced 44 

Owning  the  air 20 

Owning  the  ocean   13 

Owning  things  for  use 268 

Ox,  the,  improvement  of,  not  foretold 266 

Panama    canal    273 

Paper  money  giving  way 204 

Paying  for  coal 14 

Paying  for  air  62 

Paying  the  fiddler 96 

Pensioners,  trials  of 237 

Perform  according  to  ability 269 

Personality  of  no  consequence 261 

Personal  servants  28 

Perversity  of  human  nature 271 

Philosopher's  stone 76 

Pianos  and  pictures   165 

Pig,  improvement  of,  not  foretold 266 


INDEX  XI 

PAGE. 

Pig-iron  handlers 233 

Plague  of  human   race 23 

Playing  against  cheat's  game 231 

Poker  as  a  club 190 

Politician  to  disappear 272 

Portrait  of  man  to  be 266 

Power  of  being  boss 71 

Power  of  the  state  maintains  property 11 

Preaching  competition    48 

Pressure  from  both  sides 261 

Part  owner,  incentive  of   271 

Passing  value  from  axe  to  wood 88 

Pressing  workers  beneath  the  line 230 

Preventing    the    recurrence 267 

Primal  interests  of  the  morgan 31 

Prices   paid   workers   compared 110 

Principles  of  scientific  management 233 

Prisoner  in  cell 152 

Prisoner's  allowance,  and  wages 155;  159 

Private  owners  of  land 274 

Private  ownership,  government  of 271 

Private  profit,  private  property 277 

Prize-package   game    232 

Process  of  barter   193 

Process  of  producing  value,  beginning  of 120 

Profits  determine  "value"  of  capital 99 

Profit  from  labor  of  gentiles,  the  morgan's 26 

Property  of  the  morgan 71 

Property,  what  is  ?  11 

Protection  at  low  cost   229 

Pujo  committee  report   S507 

Purchasing  power  depressed 171 

Purpose  of  domination 75 

Purpose  of  evaluation  97 


Xll  INDEX 

PAGE. 

Purpose  of  supply  and  demand  "law" 185 

Purposeful    effort,    pleasureable 2?0 

Railroad  workers,  wages  of 249 

Raising  false  hopes 232 

Raising    valuation    103 

Raising   wages    241 

Rating  of  profits 103 

Rations  of  slave,  capital 54 

Ravage-resisting  gentiles   261 

Real  wages  . .". 252-260 

Reasoning  in  a  circle 100 

Receive  according  to  needs 269 

Reform  mufti 229 

Removing  obstructions   263 

Rendering  things  dark  and  muddy 53 

Report  of  British  Board  of  Trade 256 

Reputation  of  philanthropist 229 

Result  of  no  private  ownership 267 

Responsibility  for  "law"  of  supply  and  demand....  187 

Restraining  influence,  none  on  morgan 41 

Returns  of  gentiles  of  second  order 32 

Revulsion  against  "law"  of  supply  and  demand.  . .  .  177 

Righteousness 157 

Rights  of  human  beings 370 

Right  to  own  things 268 

"Rights"  of  property 11 

Right  to  have  without  work 269 

Right  to  work  272 

Rip  Van  Winkles &70 

Rise  in  prices  of  necessities 132 

Robin  goes  to  market 269 

Sabotage  of  the  morgan 93 


INDEX  Xlll 

PAGE. 

Salesman's  efficiency  and  pay 238 

Saloon,  attractions  of   165 

Satan  of  old,  no  longer 228 ;  229 

Saving  inures  to  benefit  of  morgan 230 

School  houses,  effect  of,  on  wages 1G5 

Sciences  of  the  ages 156 

Scientific  administration   2G7 

Scientific  standard,  of  value  1"0 

Second  order  of  gentile 29 ;     31 

Seizure  of  religion  by  the  morgan 39 

Self-preservation   180 

Self-serving  deals 272 

Selecting  a  spouse 275 

Selling  price,  measure  of  value 139 

Serf  and  baron 37 

Serf  as  producer 104 

Service,  only,  can  be  owned 11-12 

Setting  hen   and   strange  chicks 7-4 

Setting  out  an  orchard 266 

Sewing  machines    243 

Shad,  when  they  were  cheap 245 

Shave,  the,  of  the  barber 60 

Shop-keepers'  minds 262 

Sharing  nature's  free  goods '-'  •  I 

Shorter  working  days *  '•' 

Shoveling,  under  stop-watches 233 

Shutting  us  off 15.     '  ' 

Sick  slaves  1"! 

Silver  as  money ' 

Simple  administration   273 

Simple  laws   274 

Skilled  and  unskilled  labor 1°>S 

Slaves  under  the  morgan  system 26] 

Sloughing  off  the  dead  limbs 263-26  I 


XIV  INDEX 

PAGE. 

Slow  freight  and  fast  mail 56 

Small  amount  of  money  used 207 

Social  position,  marriage  for 275 

Society  of  future 266 

Society  about  kinship   25 

Sorry  controversies  of  gentiles   38 

Speeding  up  the  machine 137  ;  235 

Spirit  of   rebellion 228 

Stage  money    277 

State,  functions  of  the 271 

Statesmen  no  longer  controlling  jobs 272 

State,  the,  sustains  the  morgan 157 

Steady  employment,  steady  drudgery 271 

Stream  carrying  the  load 80 

Stratagem  of  politicians 267 

Stop-watch  work    233 

Street  gamin's  idea  of  money 198 

State,  the  morgan's  35 

Steam  power,  ownership  of 45 

Strangling  a  baby 185 

Stork's  banquet,  the  wolf  at 46 ;  184 

Stone  walls  not  necessary 158 

Strong  governments    37 

Strongest  not  strong  enough 97 

Struggle  of  the  gentiles  against  morgan 48 

Stupidity  of  the  morgan 263 

Sun's   heat    15 

Supplementing  nature 79 

Superior  brains   sloughed  off 273 

Supply  and  demand   176 ;  182 

Surplus  value 70 

Surpus  value,  formerly  small 106 

Survival  of  the  fittest 110 

Swapping  of  values 207 


INDEX  XV 

PAGE. 

Table  of  growth  of  efficiency 112 

Talent  devoted  to  the  morgan 35  ;     40 

Tangled  skein  of  business 267 

Taxes,  how  collected  195 

Taylor's  efficiency  fallacies  233 

Tearing  down  curtains  73 

Tearing  away  the  barriers 265 

Temporary  dominion  of  man 11 

Tender  conscience    157 

Three  orders  of  gentiles  27 

There  can  be  no  peace 277 

Third  order  of  gentiles 34 ;     41 

"Thou  shalt  not  covet" 38 

Thorns  in  the  living  flesh 264 

Throw  off  the  morgan's  rule 263 

Toll-gate  keeper   149 

Toothless  worms 227 

Transmission  of  value  in  production 83 

Transporter  a  producer 81 

Treasures  of  the  ages 44 

Tree  choppers,  the  83 ;     87 

Tribute-taking  morgan  an  incumbrance 263 

Trick  of  sticking  on  new  names 74 

Trolley  cars   245 

True  value   123 

Trusting  the  banks 210 

Turgot,  on  those  who  darken 5 

Turning  off  the  switch 15 ;     71 

Two  methods  of  computation  143 

Understanding  of  principal  terms 55 

Unnecessary  differences   21 

Uninfluential  stockholder?   47 

"Use."  meaning  of  in  production 70 


XVI  INDEX 

PAGE. 

Used  value  in  production 82 

Use  for  maintenance  only 11 ;  12 

"Use  value"  and  "exchange  value" 55 

Usufruct,  all  that  man  can  own 11 ;  12 

Value,  discussed  and  defined 55-69 

Value  applied  in  production   82-92 

Value  at  factory  and  at  retailers 125 

Value,  called  capital   70 

Value  expressed  in  money 138 

Value  in  satisfying  human  wants 70 

Value  in  things  in  themselves 61 

Venison  a  vehicle  to  convey  value 68 

Vested  interests,  no  more 272 

Violating  "divine"  laws 40 

Volume  of  property,  fallacy  of 17 

Wages  of  the  average  worker 246 

Wages  and  food  prices 251 

Wages  and  living,  in  Great  Britain 256-260 

Wages  actually  reduced,  average 252 

Wage  earner  managing  with   less 252 

Wages   carried  to  retail   store 130 

Wages  gravitate  to  one  point 160 

Wages,  not  received  for  labor 148-150 

"Wages",  the  term  confusing 147 

Wages,  part  of  value  produced 75 

Wages,  variance  of  ' 165 

Wall,  building  a  88 

Wars,  cause  of  will  disappear 272 

War  power  sustains  property 18 

Wastefulness  in  buying 140 

Water  as  property  12 

Water  necessary,  yet  not  value 61;  64 


INDEX  XV11 

PAGE, 

Watt  could  not  have  foretold 266 

Weeding  out   process    234-235 

Why  not  work  for  ourselves? 265 

Wine  in  the  morgan's  cask 46 

Without  tangible  cannot  own  intangible 45 

Wife,  the  hunt  for  a 275 

"Winning  more",  a  delusion 174 

Wolf,  the,  at  the  stork's  banquet 46  ;  184 

Women    selecting   husbands 275 

Wood  choppers,  the 83-87 

Work  day  shorter   245 

Worker  buys  his  living  with  labor 121 ;  142 

Worker  is  exploited  in  production 122 

Worker  receiving  less  value 242 

Woven  fabrics,  clothing  of 243 


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UNIVERSITY  OF  CALIFORNIA  LIBRARY 

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This  book  is  DUE  on  the  last  date  stamped  below. 


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&    NOV  2  9  1976 

NOV  29  I97« 


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*KocoL 


SCHffitt 


MAR  3  0  1971* 


Form  L9-Series  4939 


N?     1173 

ACO 


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